Exhibit 10.15
[LOGO] Unum
Protecting everything you work for
MARKETING CONTRACT
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This Contract is made effective January 1, 2000 , by and between
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Unum Life Insurance Company of America and its affiliates ("Unum") and USI
Insurance Services Corp. ("You"). It is mutually agreed that this Contract is
set forth upon the following terms and conditions:
1. AUTHORITY
---------
It is hereby agreed that:
(1) You will provide access to and endorse and promote Unum to producers
recruited, selected, employed, or contracted by You and identified as
subject to this Contract on Unum's systems ("Your Producers") as the
primary source for the types of insurance products listed on the Marketing
Services Fees Schedule ("Unum Products") and will promote Unum to Your
Producers in an attempt to encourage Your Producers to solicit and sell
Unum's Products.
(2) You will retain the rights to continue to act as an independent
insurance and marketing entity in all respects as to all other insurance
products of Your own and those of other companies.
(3) You are not authorized to act on behalf of Unum by any promise or
contract, incur any debt or liability in Unum's name, or alter any
provision of any Unum Product. Your entire activity is devoted solely to
providing access to, endorsing, and promoting Unum Products to Your
Producers.
(4) You shall have no authority to underwrite applications for Unum
Products received from Your Producers or administer claims for Unum
Products.
(5) Unum reserves the right to withdraw Unum Products from any and all
jurisdictions, or change rates or underwriting guidelines for Unum
Products, at any time. Unum will use best efforts to notify you of such
changes.
2. RESPONSIBILITIES
----------------
A. You understand and agree that Your responsibilities under this Contract
include the following:
(1) You represent that You have performed any background investigation
required by applicable state or federal law on all Your Producers subject
to this Contract and that Your Producers have not been convicted of a state
or federal felony crimes as of the date of the investigation that would
prohibit or disqualify them from participating in the business of
insurance.
(2) You shall instruct Your Producers that:
a. Your Producers are to solicit Unum Products only in jurisdictions
where those Products are approved for sale. Unum will provide You with
notice of the states in which Products are approved for sale.
b. Unum Products may only be solicited by Your Producers who are
legally licensed and duly appointed to solicit such Products.
c. Your Producers shall not make any representations concerning Unum
Products except those representations contained in sales literature
and advertising materials provided by Unum or previously reviewed and
approved in writing by Unum. Any such materials provided by Unum will
remain the property of Unum.
(3) You shall provide reasonable supervision designed to ensure that Your
Producers do not violate any Unum procedures or policies of which Unum has
notified You or any laws, rules or regulations of any federal, state or
local government, department or bureau having jurisdiction over the sale
and service of Unum Products.
(4) You agree to indemnify, defend, and hold Unum and its affiliates
harmless against any and all losses, fines, or damages resulting from acts,
omissions or breach by You or Your Producers of any responsibilities,
representations or obligations under this Contract or any unauthorized or
fraudulent acts or omissions by You or Your Producers, during the term of
this Contract unless such are occasioned by and directly result from the
acts or omissions of Unum. This indemnification provision shall survive
termination of this Contract.
(5) You will extend every reasonable effort to support the interests of
Unum in the sale of Unum Products by Your Producers.
(6) You agree that, during the term of this Contract and for a period of
six (6) months following the date of termination of this Contract, You will
not actively recruit as Your employee any individual who had been employed
in a field office of Unum during the one-year period immediately preceding
the date on which the individual is proposed to be employed by You. A
pattern of frequently employing such individuals will be deemed to be
conclusive proof of active recruitment.
(7) You hereby agree that You will not violate any laws, rules, or
regulations of any federal, state or local government, department or bureau
having jurisdiction over this Contract.
(8) You will notify Unum immediately in writing of the termination by You
of any of Your Producers, who are subject to the terms of this Contract or
any relationship therewith, such notice to include the reason therefor.
(9) You will provide copies of Your Producers' licensing and contracting
files upon written request from Unum upon good cause.
(10) You will designate a liaison to act as the primary contact for Unum in
matters related to the Contract.
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B. Unum understands and agrees that its responsibilities under this Contract
include the following:
(1) Unum will provide sales support to Your Producers similar to that
provided to Unum's other producers.
(2) At Unum's expense, Unum will supply Your Producers with sales kits,
brochures, sales proposals, and any other materials that are customarily
used by Unum's producers to sell Unum Products or to meet compliance
requirements.
(3) Unum will secure all appointments necessary for Your Producers to act
as representatives of Unum. Unum has the sole right to accept, reject or
terminate appointment of Your Producers to act as producers for Unum. Unum
will notify You of any such termination. Any required appointment fees will
be paid by Unum to the extent that Unum pays such fees for Unum producers.
Your Producers shall be subject to Unum's normal business policies and
procedures of which You are notified
(4) Unum agrees that, during the term of this Contract and for a period of
six (6) months following the date of termination of this Contract, Unum
will not actively recruit as its employee any career agent or other
individual who had been employed in Your field offices during the one-year
period immediately preceding the date on which the individual is proposed
to be employed by Unum. A pattern of frequently employing such individuals
will be deemed to be conclusive proof of active recruitment.
(5) Unum agrees to indemnify, defend, and hold You harmless against any and
all losses, fines, or damages resulting from acts, omissions, or breach by
Unum of any responsibilities, representations or obligations under this
Contract or any unauthorized or fraudulent acts or omissions by Unum,
during the term of this Contract unless such are occasioned by and directly
result from the acts or omissions of You or Your Producers. This
indemnification provision shall survive termination of this Contract.
(6) Unum will not encourage Your Producers to solicit or sell products
other than the Unum Products listed on the Marketing Service Fees Schedule.
(7) Unum will have sole responsibility for providing problem resolution to
Your Producers for all matters involving administration of Unum Products
placed by Your Producers. Such problem resolution is to be handled in a
manner consistent with Unum's normal operating procedure.
3. MARKETING SERVICE FEES
----------------------
As compensation for the responsibilities and obligations assumed by You pursuant
to this Contract, Unum will pay Marketing Service Fees as shown in the
applicable Schedule(s) ("Exhibit A"): (1) for individual policies on
applications taken, and (2) for employee benefits coverages, on coverages first
effected, by your Producers during the term of this Contract. In no event shall
Marketing Service Fees paid under this Contract exceed any limits imposed by
applicable law or regulation. At any time Unum determines that it is necessary
for Unum to change the rate of Marketing Service Fees under this Contract, Unum
shall give You ninety (90) days written notice of such change. You represent
that You are authorized under applicable laws and regulations to receive such
Marketing Service Fees.
Unum shall have, as a condition precedent to payment of Marketing Service Fees
due You under this
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Contract, the right to offset against any such Marketing Service Fees, any
debts, liabilities, obligations, or indebtedness which may become due at any
time from You. Further, Unum shall have the right to use and apply amounts due
under any and all contracts You have entered into with Unum or its affiliates to
offset any debts, liabilities, obligations, or indebtedness that may accrue on
any and all of said contracts. Prior to exercising its right to offset, Unurn
shall provide You with thirty (30) days written notice. If within thirty (30)
days of such notice, You satisfy all debts, liabilities, obligations, or
indebtedness, no such offset shall occur. Any debts, liabilities, obligations,
or indebtedness owed Unum shall immediately become due and payable upon
termination of this Contract.
Unum will furnish You with periodic statements showing Marketing Service Fees
payments made to You within such accounting period. Unum will also report to You
the amount and type of premium recorded by Unum and the amount and type of
compensation paid to Your Producers. You hereby agree that the ledger accounts
of Unum shall be competent and sufficient evidence of the state of accounts
between You and Unum. Failure by You to object in writing to any statement of
account furnished by Unum to You within sixty (60) days from the date of such
statement of account shall render such statement a correct account as between
You and Unum. Any amount paid to You in error shall be due and payable
immediately upon request by Unum.
Notwithstanding any term in this Contract to the contrary, Unum's obligation of
payment of Marketing Service Fees to You will cease and all Marketing Service
Fees may, at Unum's discretion, be forfeited if You systematically induce,
directly or indirectly, policyholders of Unum to replace, or discontinue the
payment of premiums on, Unum Products. This paragraph shall apply only in the
event that a pattern and practice of replacement of more than 50% of Your
inforce Unum Products is established and Unum remains a competitive provider of
Unum Products.
4. PRODUCER COMPENSATION
---------------------
Your Producers will be required to enter into standard producer contracts with
Unum in order to receive compensation, for the sale of Unum Products. Unum will
pay compensation in accordance with its applicable schedules ("Exhibit B"). Such
compensation will be paid directly to Your Producers in the same manner as Unum
compensates its other producers. Compensation rates may be changed from time to
time as set forth in such contracts. Compensation will be paid only to Your
Producers who are properly licensed and appointed in the state in which an
application is taken. Unum has the sole right to terminate such contracts
subject to Unum's normal business policies and procedures. Existing producer
contracts between Unum and Your Producers will continue in effect, subject to
termination by Unum in accordance with its rules then in effect for all such
contracts. Unum Products written under existing contracts will not be used in
determining the Marketing Service Fees payable to You pursuant to this Contract.
Unum will not knowingly enter into a separate contract with Your Producers for
Unum Products as long as Your Producer still maintains an active relationship
with You. However, if Your Producer demonstrates in writing that his or her
relationship with You has ended, Unum may enter into a new producer contract not
subject to the terms of this Contract.
5. INDEPENDENT CONTRACTOR
----------------------
You and Your Producers are independent contractors and not employees of Unum.
Nothing contained in this Contract shall be construed to create the relation of
employer and employee between Unum and You or Your Producers. Unum shall not be
responsible for the payment of any employment, income or social security taxes
for the privilege of doing business or arising in connection with the
compensation payable to Your Producers involved in the provision of the services
hereunder. Subject to this Contract, You and
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Your Producers shall be free to conduct business with such other persons and
entities and at such time and place as You and they may select.
6. TERMINATION
-----------
This Contract may be terminated without cause at any time by either party by
giving to the other party ninety (90) days written notice of termination.
In the event either party fails to comply with any material term of this
Contract, this Contract may be immediately terminated for cause by the other
party upon written notice of such failure to comply. Such notice of termination
to be effective on the date specified therein unless the other party cures such
failure within thirty (30) days of such notice.
Upon termination of this Contract, You shall immediately deliver to Unum all
materials and supplies belonging to or supplied by Unum.
The responsibilities of both parties with respect to (a) the continuing
administration and service of inforce business and (b) vested Marketing Service
Fees (if applicable) shall not be affected by such termination. Marketing
Service Fees under this Contract shall be vested only as set forth in the
applicable schedules.
7. COMPLAINTS AND RECORDS
----------------------
Each party will immediately notify the other party of any complaint against it
or Your Producers arising from performance, or lack thereof, of this Contract.
Each party will, upon receipt of any summons, complaint, or notice of suit,
forward such notice to the other party by express or overnight mail. Each party
will, upon receipt of any inquiry from an insurance department or other
regulatory body with respect to activity under this Contract, forward such
inquiry to the other party by express or overnight mail.
Each party shall maintain at its principal administrative office adequate books
and records of all transactions under this Contract. Each party shall have the
right to audit such books and records upon reasonable notice to the other party.
Such books and records shall be maintained in accordance with prudent standards
of insurance recordkeeping for the term of this Contract and for the five-year
period following the termination of this Contract.
8. NOTICES
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All notices, requests, demands and other communications between the parties
pursuant to this Contract shall be deemed delivered when mailed to the parties
as follows:
To You: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Chief Operating Officer
USI Insurance Services Corp.
▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
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To Unum: Unum
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
ATTN: National Marketing Organization
9. TERMS
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This Contract shall be governed by, construed and interpreted in accordance with
the laws of the State of Tennessee.
This Contract is binding upon Unum and You, and our respective, successors and
assigns. You are expressly prohibited from making any sale, transfer,
assignment, hypothecation or pledge of any interest whatsoever in this Contract,
or any funds due or to become due hereunder, unless expressly approved in
writing by Unum. Performance of this Contract is not contingent upon Unum's
rating, underwriting or marketing practices. This Contract does not expressly or
impliedly obligate Unum to accept insurance business from Your Producers that
does not comply with Unum's rating, underwriting or marketing practices as they
may exist and change from time to time during the term of this Contract.
This Contract, together with any amendments hereto, embodies the entire contract
between the parties with respect to the subject matter herein. No amendment,
waiver, modification, variation, or changes will be binding on any party unless
reduced to writing and signed by an authorized officer of both parties. The
failure or any delay of either party at any time to insist upon performance of
any term set forth herein shall not be construed as a waiver of performance of
such term. This Contract cancels and supersedes all previous understandings,
agreements or contracts, whether written or oral, between the parties with
respect to the subject matter herein. If any provision of this Contract should
be determined to be invalid or otherwise unenforceable under law, the remainder
of this Contract shall not be affected thereby.
Each party acknowledges that, in performing its responsibilities under this
Contract, it may receive disclosure of the other party's valuable, confidential,
unique, and proprietary information ("Confidential Information"). If such
Confidential Information is designated in writing as such, then, except as
provided in this Contract or as reasonably required to perform its duties and
obligations under this Contract, neither party shall, directly or indirectly,
disclose, sell or otherwise transfer or make available to any third party, or
use for any purpose, any Confidential Information in its possession.
Confidential Information shall not include (a) any information that is or
becomes generally available to the public, other than as a result of breach of
this Contract or (b) any information that is lawfully obtained from a third
party with the right to disclose such information, or (c) any information that
each party either possessed prior to the effective date on this Contract or
independently developed at any time.
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IN WITNESS WHEREOF, this Contract has been duly executed.
Unum Life Insurance Company of USI Insurance Services Corp. of San
America and its affiliates Francisco, California
("Unum") ("You")
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇ By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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▇▇▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Name Name
VP, National Marketing Organization President & COO
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Title Title
2-14-00 50 California
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Date ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇.▇. ▇▇ ▇▇▇▇▇
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City, State, Zip
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Exhibit A
NET ALLOWANCE SCHEDULE
FOR
USI INSURANCE SERVICES CORP.
INDIVIDUAL DISABILITY INCOME PRODUCTS
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Marketing Service Fees:
-----------------------
An Individual Disability Income Marketing Service Fee will be paid based on
total paid first-year IDI comissionable premium sold by USI Insurance Services
Corp. and accepted by UNUM Life Insurance Company of America and its affiliates
herein referred to as the "Company" according to the following schedule:
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Illegible
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First $1,000,000 10.0% 2.0%
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Next $1,000,000 13.0% 2.0%
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Next $1,000,000 17.0% 2.0%
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Next $1,000,000 19.0% 2.0%
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Over $4,000,000 21.0% 2.0%
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.. When the total paid first-year IDI commissionable premium equals any of the
listed thresholds, the higher first-year IDI Marketing Service Fee will be
paid on the incremental paid first-year commissionable premium.
.. Production related to Accident Income Recovery (Policy Form 475) and
Essential Disability Protection (EDP) will apply in calculating the total
paid first-year IDI commissionable premium; however, Marketing Service Fees
will not be paid on these products.
.. Amounts paid to producers associated with USI Insurance Services Corp.
under the Premier Bonus program (or any successor or replacement program)
will be deducted from Marketing Service Fees otherwise payable to USI
Insurance Services Corp.
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EMPLOYEE BENEFITS PRODUCTS
--------------------------
Marketing Service Fees:
-----------------------
An Employee Benefits Marketing Service Fee will be paid based on total paid
first-year Employee Benefits commissionable premium sold by USI Insurance
Services Corp. according to the following schedule:
A. Base Amount: A guaranteed payment amount of 1.0% of new annualized
first-year Employee Benefits premium.
B. Block Management Bonus: See the following schedule.
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Illegible Illegible Illegible Illegible Illegible
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87% to 89.99% 0% 0.5% 1.5% 2.0%
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90% to 92.99% 1.0% 1.5% 2.0% 2.75%
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93% to 95.99% 1.5% 2.0% 2.75% 3.75%
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96% and above 2.0% 2.75% 3.75% 5.0%
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.. Amounts paid to producers associated with USI Insurance Services Corp.
under the Premier Bonus program (or any successor or replacement program)
will be deducted from Marketing Service Fees otherwise payable to USI
Insurance Services Corp.
.. A pro-rata refund must be made to the Company for any Marketing Service
Fees on premiums refunded for any reason, at the same rate at which
Marketing Service Fees were originally paid.
.. For purposes of this Schedule, Persistency is defined as a fraction, the
denominator of which is "Beginning Inforce", as defined herein, and the
numerator of which is "Year End Inforce", as defined herein. The resulting
fraction shall be expressed as a percentage, rounded to the nearest
hundredth of a percent.
For the purposes of this Schedule, Beginning Inforce shall mean the
aggregate annualized Product premium from cases that are in force on
January 1 of the calendar production year, and on which a USI Insurance
Services Corp. representative is the designated "Broker-of-Record", as
defined herein.
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For the purposes of this Schedule, Year End Inforce shall mean "Beginning
Inforce" minus the aggregate annualized Product premium which is lost from
Beginning Inforce during the calendar production year due to termination,
cancellation, or other discontinuance of insurance, and excluding any new
Product premium produced in such calendar production year.
For the purposes of this Schedule, Broker-of-Record shall mean the broker
designated by the policyholder or contract holder and recognized by Unum as
entitled to receive commissions or service fees on a policy or contract to
which this Schedule applies.
.. Marketing Service Fees will not be paid on Employee Benefits plans written
on an ASO financing arrangement, Mini Plans or Broker-of-Record changes.
.. Marketing Service Fees will not be paid on Employee Benefit Reserve
buyouts.
.. Employee Benefit cases which migrate between companies in the UNUM group
will not count as new business for allowance/compensation purposes.
VOLUNTARY BENEFITS PRODUCTS
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Marketing Service Fees:
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A first-year Voluntary Benefits Marketing Service Fee will be paid based on
total annualized commissionable VB premium sold by USI Insurance Services Corp.
according to the following schedule:
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Illegible Illegible
----------------------------
First $500,000 1.00%
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Next $400,000 2.75%
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Next $600,000 4.75%
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Over $1,500,000 6.75%
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.. When the total annualized commissionable VB premium sold equals any of the
listed thresholds, the higher first-year Voluntary Benefits Marketing
Service Fee will be paid on incremental total annualized commissionable VB
premium.
.. Amounts paid to producers associated with USI Insurance Services Corp.
under the Top Tier program (or any successor or replacement program) will
be deducted from Marketing Service Fees otherwise payable to USI Insurance
Services Corp.
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.. The Company will be due a pro-rata refund of the first-year Marketing
Service Fees on premiums refunded for any reason at the same rate at which
the Marketing Service Fees were originally paid.
GENERAL PROVISIONS
l. Marketing Service Fees on temporary flat extra premiums, waived premiums,
forgiven premium, discontinued/suspended premiums, internal rollovers,
policy or administrative fees, or on the amount of permanent table-rated or
percentage-rated premiums will be payable only as provided in the Company's
then current rules and practices.
2. Unless provided otherwise, Marketing Service Fees payable on supplementary
benefits will be at the same rates and subject to the same provisions as
the policies to which they are attached.
3. On any policy eligible for discount(s), Marketing Service Fees payable
shall be based on the actual premiums paid.
4. If this Contract is terminated, the applicable first year and renewal
Marketing Service Fees which are otherwise payable on premiums received by
the Company shall be continued only through the tenth policy year.
5. The unearned portion of any Marketing Service Fees paid to USI Insurance
Services Corp. under a policy that has been terminated prior to the first
policy anniversary date will be charged back to USI Insurance Services
Corp. as an indebtedness to the Company.
6. Marketing Service Fees payable on policy changes, made-over policies, or
policies being replaced by a new policy will be determined by the Company
in accordance with its then current rules and practices.
7. The Company reserves the right to withdraw products or product lines from
any and all jurisdictions at any time. The Company may introduce new
products from time to time and compensation rates on such products will be
established at the time of product introduction and may differ from rates
published in this schedule.
8. For policies with issue ages 65 and above, Marketing Service Fees will be
determined by the Company in accordance with its then current rules and
practices.
9. Compensation rates may vary in some states due to regulatory requirements.
Premiums received on policies issued in such states shall earn compensation
as set forth in separate schedules.
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Exhibit B
COMMISSION SCHEDULED FOR BROKERS
Illegible
In accordance with the Compensation section in Your Contract/Agreement
(hereinafter referred to as contract), this schedule is hereby adopted as
part of that contract and replaces all prior commission schedules and
contract amendments for business applied for on or after the effective date
of this schedule. This schedule applies only to policies as so defined and
classified by the Company which the Broker has been authorized to represent
pursuant to the above-referenced contract.
COMMISSIONS AND SERVICE FEES
1. INDIVIDUAL INCOME PROTECTION ("IIP") first year commissions, renewal
----------------------------
commissions and service fees will be payable to You as a percentage of
commissionable premiums accepted by the Company on policies issued and
placed on applications written personally by You, or in Your name, at the
following rates:
First Year Commission: Renewals and Service Fees:
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Illegible
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Individual Income Protection 50% 1-7,499 5% 2.5% 2%
Products
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(except as noted below for 7,500 - 14,999 10% 5% 2%
Accident
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Income Recovery and Secure- 15,000 - 34,999 15% 10% 5%
Pak Plus)
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35,000+ 17.5% 12.5% 5%
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Accident Income Recovery 65% NA 0% 0% 0%
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Illegible
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2 Year Benefit Period 60% 6% 6%
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5 Year and Age 65 Benefit 50% 5% 2%
Periods
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A. For AIB, FIO, GPI, GCI riders, Update, Indexing and similar Individual
Income Protection policy riders or additions, the rates in this schedule
apply to the premium charged for these riders or additions at the time of
policy issue. When the benefit is exercised, the commissions on the new
additional premium for the increased insurance will be paid according to
Company rules and practices then in effect.
B. For multi-life/large case policies issued as part of a special discount
plan approved in advance, compensation will be adjusted in accordance with
the Company's then current rules and practices.
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C. Renewal commission rates are determined for years 2 through 10 based upon
the level of New Net Annualized Premium produced in the calendar year in
which the policy was placed and paid.
2. INDIVIDUAL LONG TERM CARE INSURANCE first year commissions, renewal
-----------------------------------
commissions and service fees will be payable to You as a percentage of
commissionable premiums accepted by the Company on policies issued and
placed on applications written personally by You, or in Your name, at the
following rates:
--------------------------------------------------------------------------
Illegible
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Year 1 Year 2-10 Years 11 +
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Issue Age Year 1 Net In Force ILTC Premiums:
--------- Annualized
Less than 75 50% ILTC Premium: 7.5% Less than $25,000 0%
75 or More 40% Less than $35,000 10.0 $25,000 or More 5%
$35,000 or More %
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Illegible
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Year 1 Year 2-10 Years 11+
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Issue Age In Force ILTC Premium
---------
Less than 75 25% 15% Less than $25,000 0%
75 or More 20% $25,000 or More 5%
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--------------------------------
Illegible
--------------------------------
Year 1 Year 2 - 10 Years 11+
--------------------------------
32% 16% 0%
--------------------------------
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Illegible
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Years 1 - 3 Years 4-10 Years 11+
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Issue Age In Force ILTC Premium:
--------- Less than $25,000 0%
Less than 75 32% 4% $25,000 or More 5%
75 or More 25%
------------------------------------------------------------
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--------------------------------------------------------------------------------
Illegible
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Year 1 Year 2-10 Year 11+
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Issue Age Year 1 Net Annualized In Force ▇▇.▇▇ Premium:
--------- ILTC Premium:
-------------
Less than 40 Less than $7,500 10% Less than $25,000 0%
75 % $7,500 to less than $15,000 11% $25,000 or More 5%
75 or 30 $15,000 to less than 12%
More % $30,000 13%
$30,000 to less than 14%
$50,000
$50,000 or more
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INDIVIDUAL LONG TERM CARE INSURANCE: Level Commission Scale Option
-----------------------------------
--------------------------------------------------------------------------------
Illegible
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Years 1 - 10 Years 11 +
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15% In Force ILTC Premium:
----------------------
Less than $25,000 0%
$25,000 or more 5%
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Level Commission Scale Industry
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Years 1 - 10 Years 11 +
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18% 0%
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A. While Broker's contract is active, Broker must maintain at least $10,000 of
annualized ILTC in force premium to receive ongoing commission in years 11
and on.
B. For purposes of computing the Commissions Payable on ILTC premiums paid on
policies with an Accelerated
Premium Option rider, only sixty percent (60%) of such premiums shall count
as paid premium.
C. Commissions Payable on Individual Long Term Care policies shall be
determined either on a HI/LO commission scale or a Level commission scale
(as illustrated in this schedule). You shall provide the Company written
notification of which commission scale, HI/LO or Level, is to be used to
determine Commissions Payable under this commission Schedule. The Company
must receive such written notification, on a form approved by the Company,
before Your first submission of an Individual Long Term Care application
following the effective date of this Commission Schedule. If You fail to
provide the Company with such written notification, the Company shall
determine Commissions Payable using the HI/LO commission scale.
3. INDIVIDUAL LIFE INSURANCE first year commissions, renewal commissions and
-------------------------
service fees will be payable to You as a percentage of commissionable
premiums accepted by the Company on policies issued and placed on
applications written personally by You, or in Your name, at the following
rates:
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Life Insurance First Year Commission: Renewals and Service Fees:
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Illegible Illegible Illegible Illegible Illegible
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Term
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Level I Term (10 & 15 year) 60% 0% 0% 0%
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Level I Term (20 year) 70% 0% 0% 0%
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Level II Term 80% 0% 0% 0%
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Executive Life Carve-Out 10% 6% 6% 6%
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Permanent
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Low Premium UL 80% 6% 5% 2%
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Cash Accumulation UL 80% 5% 5% 2%
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UL-2100 80% 6% 6% 3%
------------------------------------------------------------------------------
Survivorship 65% 3% 3% 2.5%
------------------------------------------------------------------------------
A. For universal life products and Survivorship, commission rates apply to
premiums paid on commissionable minimum cost of insurance premium.
Commissions Payable on excess premium deposits, above the commissionable
minimum cost of insurance premium, is 3% in all years the excess premium is
paid.
B. Commission Payable on term insurance re-entry is one-half the base first
year commission rates shown in the table.
4. GROUP INSURANCE commissions will be payable to You as a percentage of
---------------
commissionable premiums accepted by the Company on Group policies issued
and placed on applications written personally by You, or in Your name, at
the following rates:
-----------------------------------------------------------------------------
Product Illegible Illegible
-----------------------------------------------------------------------------
LTD, Catastrophic Disability, On the first $15,000 15%
DBL, Mini Plans and Flex LTD
---------------------------------------------
On the next $10,000 10%
---------------------------------------------
On the next $25,000 5%
---------------------------------------------
On amounts in excess of $50,000 1%
-----------------------------------------------------------------------------
Life, Flex Life, AD&D, Flex On the first $10,000 12%
AD&D, STD, Flex STD
---------------------------------------------
On the next $15,000 7%
---------------------------------------------
On the next $25,000 5%
---------------------------------------------
On the next $50,000 1%
---------------------------------------------
On amounts in excess of $100,000 0.5%
-----------------------------------------------------------------------------
Group Long Term Care * All Premium 15%
-----------------------------------------------------------------------------
* The Rate of Commissions, on Group LTC policies in Pennsylvania, is 10% of
Policy Year Paid Annual Premium.
-----------------------------------------------------------------------------
15
---------------------------------------------------------------
Illegible Illegible
---------------------------------------------------------------
Voluntary LTD 15% of all premium
---------------------------------------------------------------
Voluntary Life 15% of all premium
---------------------------------------------------------------
Voluntary AD&D 15% of all premium
---------------------------------------------------------------
Voluntary LTC 15% of all premium
---------------------------------------------------------------
Voluntary LTC in PA 10% of all premium
---------------------------------------------------------------
Illegible Illegible Illegible
---------------------------------------------------------------
Voluntary LTD, Life and AD&D 50% to less than 75% 5%
--------------------------------
75% or greater 7.5%
---------------------------------------------------------------
Voluntary LTC 15% to less than 25% 5%
--------------------------------
Greater than 25% 7.5%
---------------------------------------------------------------
--------------------------------------------------------------------------------
Illegible
--------------------------------------------------------------------------------
On premiums for flexible benefit plans, commissions are calculated on each
coverage by using the appropriate commission rates listed above. If service fees
apply, an additional 5% of the annualized fee will be paid based on policyholder
modal payments.
---------------------------------------------------------------
Illegible Illegible
---------------------------------------------------------------
Business Travel 15% of all premium
---------------------------------------------------------------
Voluntary AD&D 15% of all premium
---------------------------------------------------------------
Basic 24 Hour AD&D 15% of all premium
---------------------------------------------------------------
---------------------------------------------------------------
Illegible Illegible
---------------------------------------------------------------
GUL 10%
---------------------------------------------------------------
A. The Company's determination of the applicability of the commission tables
to specified insurance plans and coverages, as defined in Company
materials, shall be conclusive and shall be made within a reasonable time
after the effective date of any such coverage. The Company reserves the
right at any time to review and revise any such determination. The Company
also reserves the right at any time to review the determination of the
applicability of the commission table for any product that may have been
omitted at the effective date of the schedule.
16
B. Commissions shall be paid only on the total premium paid to the Company for
insurance in force during all or part of each policy year, after
appropriate adjustments have been made for additional premiums or premium
refunds applicable to such policy year.
C. If, after its effective date, a policy is amended, and if the additional
premiums payable under or on account of such amendment or amendments are
determined by the Company to be NBOC premiums, commissions on such
additional premiums will be payable under this schedule at such rate and
such point in scale as the Company shall determine, but such commissions
will be payable to the broker then designated by the policyholder as
Broker-of-Record for such business.
5. VOLUNTARY BENEFITS first year commissions, renewal commissions and service
------------------
fees will be payable to You as a percentage of commissionable premiums
accepted by the Company on Voluntary Benefits contracts issued and placed
on applications written personally by You, or in Your name, at the
following rates:
Voluntary Benefits First Year Commission: Renewals and Service Fees:
---------------------------------------------------------------------
Illegible Illegible Illegible Illegible
---------------------------------------------------------------------
PS Enhancer Disability (A) 60% 6% 6%
---------------------------------------------------------------------
PS Enhancer Disability (B) 50% 10% 10%
---------------------------------------------------------------------
Fortune Universal Life 65% 5% 0%
---------------------------------------------------------------------
Cancer Assistance
---------------------------------------------------------------------
Issue Age 0-54 70% 10% 10%
---------------------------------------------------------------------
Issue Age 55+ 40% 10% 10%
---------------------------------------------------------------------
PS1000 Universal Life 75% 5% 2.5%
---------------------------------------------------------------------
PS2000 Excess Interest Whole 90% 5% 2.5%
Life
---------------------------------------------------------------------
Voluntary Income Recovery:
. Accident 60% 10% 10%
. Disability 60% 6% 6%
---------------------------------------------------------------------
A. Commissions and service fees on other Voluntary Benefits products not
listed will be in accordance with the Company's then current rules and
practices at the time the policy is placed and paid.
B. All Voluntary Benefits cases are subject to the Company's home office
pre-approval.
C. For universal life products, commission rates apply to premiums paid on
commissionable minimum cost of insurance premium. Commission Payable on
excess premium deposits, above the commissionable minimum cost of insurance
premium, is 3% in all years the excess premium is paid.
D. Commissions Payable on Voluntary Benefit products governed by state law
that varies from rates shown will be paid according to the applicable rate
prescribed by state law.
17
--------------------------------------------------------------------------------
Illegible
--------------------------------------------------------------------------------
1. Commissions and Fees. Commissions and fees on temporary flat extra
premiums, waived premium, forgiven premium, discontinued/suspended
premiums, internal rollovers, and/or automatic premium loans, policy or
administrative fees, or on the amount of permanent table-rated or
percentage-rated premiums will be payable only as provided in the Company's
then current rules and practices.
2. Supplementary Benefits. Unless provided otherwise, commissions and fees
payable on supplementary benefits will be at the same rates and subject to
the same provisions as the policies to which they are attached.
3. Discounts. Commissions and fees payable shall be based upon the actual
commissionable premiums paid on any policy eligible for discount(s).
4. Vesting and Payment of Commissions after Contract Termination. First year
and renewal commissions otherwise payable to You on Voluntary Benefits and
Individual Life Insurance premiums received by the Company shall be
continued only through the tenth (10th) policy year. Individual Income
Protection (IIP) in force premium will be reviewed annually in January of
each year after Your termination and first year and renewal commissions and
service fees shall be paid to You according to the following:
a. If You have $25,000 or more of IIP annual premium in force,
compensation will be paid during that year on all IIP premium received
by the Company.
b. If You have $10,000 but less than $25,000 of IIP annual premium in
force, first year and renewal commissions for policy years two (2)
through ten (10) only will be paid during that year on IIP premium
received by the Company.
c. If You have less than $10,000 of IIP annual premium in force, first
year and renewal commissions for policy years two (2) through ten (10)
only will be paid on IIP premium received by the Company during that
year only and no subsequent compensation will be paid in future years.
Individual Long Term Care (ILTC) in force premium will be reviewed annually in
January of each year after Your termination and first year and renewal
commissions shall be paid to You according to the following:
a. If You have $10,000 or more of ILTC annual premium in force,
compensation will be paid during that year on all ILTC premium
received by the Company.
b. If You have less than $10,000 of ILTC annual premium is in force,
first year and renewal commissions for policy years two (2) through
ten (10) only will be paid during that year on ILTC premium received
by the Company.
Group commissions shall be paid to You according to the following:
a. No new commissions will be paid to You for new business submitted on
any existing Group policy for which You are the Broker-of-Record.
b. You will continue to receive commissions, payable on premiums received
by the Company, on any Group policy that is in force at the time of
Your termination as long as You are recognized as the Broker-of-Record
for that Group policy.
c. Following Your termination as Broker-of-Record on any Group policy,
You shall have no further rights to the commission payable on premiums
received by the Company on that Group policy.
5. Minimum Compensation Payment. If Your total current and accumulated
compensation is less than $100, compensation may be accumulated until such
compensation exceeds $100 before being paid to You.
18
6. Unearned Commissions. The unearned portion of any first year commissions
paid to You under a policy which has terminated prior to the first policy
anniversary date will be charged back to You as an indebtedness to the
Company.
7. Policy Exchanges, Make-Overs, Replacements. Commissions Payable on policy
changes, made-over polices, or policies being replaced by a new policy will
be determined by the Company in accordance with its current rules and
practices.
8. Applicable Schedule. Application of compensation schedules is subject to
the Company's administrative procedures that determine which compensation
schedule is applicable to Your contract.
9. Separate Schedule. Notwithstanding anything in this schedule to the
contrary, premiums received for Individual Life Insurance and Voluntary
Benefits Life Insurance products issued by the Company on applications
written by You or in Your name in the state of New York shall earn
compensation as set forth in a separate schedule.
10. Products. The Company reserves the right to withdraw products or product
lines from any and all jurisdictions at any time. The Company may introduce
new products from time to time and compensation rates on such products will
be established at the time of product introduction which may differ from
the rates published in this schedule.
11. Issue Ages 65 and Above. For policies with issue ages 65 and above, the
base commission rates will be determined by the Company in accordance with
its then current rules and practices.
12. Conversion Privilege. For policies issued in accordance with any conversion
privilege, first year and renewal commissions will be in accordance with
the Company's then current rules and practices.
13. Regulatory Requirements. Compensation rates may vary in some states due to
regulatory requirements. Premiums received on policies issued in such
states shall earn compensation according to the applicable rate prescribed
by state law.
--------------------------------------------------------------------------------
Illegible
--------------------------------------------------------------------------------
1. Broker-of-Record. The broker requested by the policyholder, and accepted by
the Company, as being entitled to receive commissions and/or service fees
on the policy(ies) to which this schedule applies.
2. Commissions Payable. Commissions due to You on applicable premium pursuant
to the terms and conditions of this Commission Schedule and Your Broker's
Contract.
3. Commissionable Premium. On Individual Income Protection and Individual
Life, commissionable premium is equal to gross premium minus policy fees
and premium rated in excess of 30%. On Individual Long Term Care,
commissionable premium is equal to premium received.
19
4. In Force Premium. Calculated as the sum of premiums, due from
policyholders, on policies which are in effect.
5. NBOC (New Business on Old Contracts) Premiums. Premium generated by an
amendment made to a policy after that policy's original effective date,
which: a) extends coverage to employees of affiliated or subsidiary
companies or groups not previously insured by the Company; b) covers
classes of employees or members not insured by the Company on such
effective date; c) increases or modifies the insurance provided by the
schedule of insurance in the policy then in effect; or d) adds any
insurance coverage not included on the effective date, as determined by the
Company at the time of change.
6. New Net Annualized IIP Premium. The Sum of the first year modal IIP
Commissionable Premiums multiplied by the number of modals in the policy
year less any unearned premium due to terminations during the Production
Year.
7. Group Policy. The master policy contract with the employer, association or
board of trustees as the case may be and not the individual certificates
issued thereunder to the employees or members, as the case may be.
8. Policy or participation year. Any period of twelve (12) consecutive months
terminating on an anniversary of the effective date of the policy.
9. Production Year. A twelve-month period of time between January 1 and
December 31 inclusive.
20
--------------------------------------------------------------------------------
Illegible
--------------------------------------------------------------------------------
In accordance with the Compensation section Your Contract/Agreement (hereinafter
referred to as Contract), this schedule is hereby adopted as part of that
contract and replaces all prior incentive compensation schedules and contract
amendments for business written on or after the effective date of this schedule.
This schedule applies only to policies as so defined and classified by the
Company which the Broker has been authorized to represent pursuant to the
Contract.
--------------------------------------------------------------------------------
Illegible
--------------------------------------------------------------------------------
The following products are eligible: Individual Income Protection (including
Indexing, AIB's, GCI's, FIO's, Updates and Step Rates), Individual Long Term
Care and Individual Life.
. Multi-life/large case premium discount Individual Income Protection
policies are excluded from the New Sales Incentive payment but will be
included for calculating eligibility for incentive qualification
level.
. ILTC Pennsylvania policies are excluded from the New Sales Incentive
program.
. Indexing, FIOs and Step Rate premiums exercised on Unum policies with
an original policy application date prior to 1/1/2000 are excluded
from the New Sales Incentive program
-----------------------------------------------------------
Illegible
-----------------------------------------------------------
$ 1,000 Minimum Threshold
-----------------------------------------------------------
$ 7,500 I
-----------------------------------------------------------
$15,000 II
-----------------------------------------------------------
$30,000 III
-----------------------------------------------------------
$50,000 IV
-----------------------------------------------------------
The Individual Products New Sales Incentive is calculated and paid quarterly
based upon Your cumulative net paid annualized individual new premium. Each
quarterly incentive payment represents the difference in the year-to-date
incentive calculation less any previous incentive payments made year-to-date.
The calculation of the incentive will be determined by the Company in accordance
with its then current rules and practices.
21
--------------------------------------------------------------------------------
Illegible
--------------------------------------------------------------------------------
Each new sale of the following Group products will earn one new coverage
credit:
---------------------------------------------------------------------------
Long Term Disability Flex Long Term Disability
---------------------------------------------------------------------------
Short Term Disability Flex Short Term Disability
---------------------------------------------------------------------------
Life Flex Life
---------------------------------------------------------------------------
Accidental Death & Dismemberment Flex Accidental Death & Dismemberment
---------------------------------------------------------------------------
Long Term Care Lifestyle LTD
---------------------------------------------------------------------------
Special Risk Lifestyle Life
---------------------------------------------------------------------------
Group Universal Life Lifestyle AD&D
---------------------------------------------------------------------------
Lifestyle Long Term Care
---------------------------------------------------------------------------
Note: All mini-plans are excluded.
Qualification is as follows:
-----------------------------------------------------
Illegible
-----------------------------------------------------
3 Or $ 50,000 Minimum Threshold
-----------------------------------------------------
5 Or $ 150,000 I
-----------------------------------------------------
15 Or $ 500,000 II
-----------------------------------------------------
25 Or $ 750,000 III
-----------------------------------------------------
35 Or $1,500,000 IV
-----------------------------------------------------
The Group Products New Sales Incentive is calculated and paid quarterly based
upon Your cumulative new coverage credits or Your Submitted Group Net Annualized
New Premium. Each quarterly bonus payment represents the difference in the
year-to-date bonus calculation less any previous bonus payments made
year-to-date. The calculation of the bonus will be determined by the Company in
accordance with its then current rules and practices.
22
--------------------------------------------------------------------------------
Illegible
--------------------------------------------------------------------------------
The following Voluntary Benefits products are eligible:
--------------------------------------------------------------------------------
PS Enhancer Disability (A) PS2000 Excess Interest Whole Life
--------------------------------------------------------------------------------
PS Enhancer Disability (B) Voluntary Income Recovery:
-------------------------------------------
Fortune Universal Life Accident
-------------------------------------------
Cancer Assistance Disability
--------------------------------------------------------------------------------
PS1000 Universal Life
--------------------------------------------------------------------------------
Qualification is as follows:
--------------------------------------------------------------------------------
Illegible Illegible
--------------------------------------------------------------------------------
$ 15,000 Minimum Threshold
--------------------------------------------------------------------------------
$ 50,000 I
--------------------------------------------------------------------------------
$100,000 II
--------------------------------------------------------------------------------
$150,000 III
--------------------------------------------------------------------------------
$250,000 IV
--------------------------------------------------------------------------------
The Voluntary Benefits Products New Sales Incentive is calculated and paid
quarterly based upon Your Net Paid Annualized Voluntary Benefits New Premium.
Each quarterly bonus payment represents the difference in the year-to-date bonus
calculation less any previous bonus payments made year-to-date. The calculation
of the bonus will be determined by the Company in accordance with its then
current rules and practices.
23
--------------------------------------------------------------------------------
Illegible
--------------------------------------------------------------------------------
The Cross Sell Reward, for the New Sales Incentives, is an adjustment factor
which is calculated quarterly based upon one of the above-described options.
Achieving a cross sell reward results in Your current basic qualification level
being adjusted upward by one (1) level. The calculation of the adjustment, and
resulting incentive, will be determined by the Company in accordance with its
then current rules and practices.
--------------------------------------------------------------------------------
Illegible
--------------------------------------------------------------------------------
INDIVIDUAL PRODUCTS: Payment is a percentage of Net Paid Annualized
Individual New Premium
------------------------------------------------------------------------------------
Porducts Level I Level II Level III Level IV Level V
------------------------------------------------------------------------------------
Individual Income Protection * 5% 10% 15% 20% 22%
------------------------------------------------------------------------------------
Individual Life * 5% 7.5% 12.5% 17.5% 20%
------------------------------------------------------------------------------------
Individual Long Term Care 2.5% 5% 10% 15% 15%
------------------------------------------------------------------------------------
* Secure-Pak Plus and Executive Life Carve-Out have a separate payment structure
as follows:
------------------------------------------------------------------------------------
Products Level I Level II Level III Level IV Level V
------------------------------------------------------------------------------------
.. Secure-Pak Plus 1% 2% 3% 4.5% 5%
.. Executive Life Carve-Out 1% 2% 3% 4.5% 5%
------------------------------------------------------------------------------------
24
GROUP PRODUCTS: Payment is a percentage of standard annualized base
commissions
------------------------------------------------------------------------------------
Porducts Level I Level II Level III Level IV Level V
------------------------------------------------------------------------------------
ALL Eligible Products 10% 20% 40% 50% 55%
------------------------------------------------------------------------------------
VOLUNTARY BENEFITS PRODUCTS: Payment is a percentage of Net Paid Annualized
Individual New Premium
------------------------------------------------------------------------------------
Porducts Level I Level II Level III Level IV Level V
------------------------------------------------------------------------------------
ALL Eligible Products 1% 2% 3% 4.5% 5%
------------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Illegible
--------------------------------------------------------------------------------
INDIVIDUAL PRODUCTS (Payment is equal to the qualification percentage
-------------------
multiplied by Individual Products collected renewal premium during the current
Production Year.)
Minimum Eligibility: $150,000 of in force Individual Products premium as of the
end of the prior Production Year and a minimum of Net Paid Annualized Individual
New Premium during the current Production Year.
Eligible Products: All Individual Income Protection Products, Individual Long
Term Care and Provident/▇▇▇▇ ▇▇▇▇▇▇ Individual Life.
--------------------------------------------------------------------------------
Illegible
--------------------------------------------------------------------------------
At least $150,000 At least $400,000 At least $800,000
--------------------------------------------------------------------------------
$ 25,000 1% 1.5% 2%
--------------------------------------------------------------------------------
$ 50,000 1.5% 2% 3%
--------------------------------------------------------------------------------
$100,000 2% 3% 4%
--------------------------------------------------------------------------------
25
GROUP PRODUCTS (Payment is equal to the qualification percentage multiplied by
--------------
Group Products Earned Renewal Commissions paid during the current Production
Year.)
Minimum Eligibility: $150,000 of in force Group Products premium as of the end
of the prior Production Year and a minimum of Submitted Group Net Annualized New
Premium during the current Production Year.
Eligible Products: LTD, STD, Life, AD&D, Group Universal Life, Special Risk,
GLTC, Flex LTD, Flex STD, Flex Life, Flex AD&D, Lifestyle LTD, Lifestyle Life,
Lifestyle AD&D, Lifestyle GLTC.
The following are excluded from the Group Products In Force Incentive:
.. Mini-plans
.. UnumAmerica/Commercial Life Group Association Business
.. Voluntary Benefits products
--------------------------------------------------------------------------------
Illegible
--------------------------------------------------------------------------------
At least 90% At least 94% At least 98%
--------------------------------------------------------------------------------
$ 50,000 5% 7% 10%
--------------------------------------------------------------------------------
$100,000 7% 10% 15%
--------------------------------------------------------------------------------
$200,000 8% 13% 18%
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
CENTRAL PROVISIONS
--------------------------------------------------------------------------------
1. Payments. Incentive compensation on temporary flat extra premiums, waived
premium, forgiven premium, discontinued/suspended premiums, internal
rollovers, and/or automatic premium loans, policy or administrative fees,
or on the amount of permanent table-rated or percentage-rated premiums will
be payable only as provided in the Company's then current rules and
practices.
2. Applicable Schedule. Application of compensation schedules is subject to
the Company's administrative procedures that determine which incentive
compensation schedule is applicable to Your contract.
3. Changes. The Company reserves the right to change, modify, alter, or revise
any incentive level or threshold requirement in the incentive compensation
schedules for any future qualification period. Notice of such change will
be given to producers who have qualified for any such incentive payment in
the previous qualification period and to new qualifiers at the time of
incentive payment.
4. Products. The Company reserves the right to withdraw products or product
lines from any and all jurisdictions at any time. The Company may introduce
new products from time to time and incentive payments on such products will
be established, at the time of product introduction, that may differ from
rates published in this schedule.
26
5. Policies with issue ages 65 and above. For policies with issue ages 65 and
above, incentive payments will be determined by the Company in accordance
with its then current rules and practices.
6. Separate Schedule. Notwithstanding anything in this schedule to the
contrary, premiums received for Individual and Voluntary Benefits life
insurance products issued by the Company on applications written by You or
in Your name in the state of New York shall not count toward the new sales
incentives or inforce incentives.
7. Individual Long Term Care policies issued in Delaware, Indiana, Michigan,
Pennsylvania and Wisconsin. For ILTC policies issued in the states
mentioned above, they will be included toward the in force incentive
qualification; however, they will not count toward payment.
--------------------------------------------------------------------------------
DEFINITIONS of terms used herein
--------------------------------------------------------------------------------
1. Annualized Terminated Premium. The aggregate annualized premium lost from
Beginning Annualized In Force Premium during the Production Year due to
termination, cancellation, or other discontinuance of insurance.
2. Beginning Annualized In Force Premium. The aggregate annualized in force
premium from Eligible Products that are effective prior to the beginning of
the Production Year and in force at the beginning of the Production Year
and on which the Broker is the designated Broker-of-Record.
3. Collected Renewal Premium. Premium received from the policyholder in policy
years two plus and recorded as paid by the Company.
4. Earned Renewal Commissions. Commissions earned from premiums received from
the policyholder in policy years two plus and recorded as paid by the
Company.
5. Net Paid Annualized New Premium. The product of the first year modal
Commissionable Premiums, from products sold, multiplied by the number of
modals in the policy year less any unearned premium due to first policy
year terminations during the production year.
6. Premium Persistency. A fraction, the numerator of which is the difference
between Your Beginning Annualized In Force Premium and Your Annualized
Terminated Premium. The denominator is the equal to the Beginning
Annualized In Force Premium. The fraction results in a percentage which
will be rounded to the nearest tenth of a percent.
7. Production Year. A twelve-month period of time between January 1 and
December 31.
8. Submitted Premium. Premium associated with an application for insurance
placed by You with The Company for which no premium has yet been paid.
27
[LOGO] Unum(R)
----------
Protecting everything you work for
October 30, 2000
▇▇. ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Assistant to General Counsel
USI Insurance Services Corporation
▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇., ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Re: Consulting Engagement letter
Dear Joey:
Please find enclosed an original copy of the signed Amendment To Marketing
Contract for your files.
If you have any questions, please do not hesitate in calling me at (423)
642-4434. Thank you.
Sincerely,
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇
Account Manager
TEP/hs
Enclosure
Unum Provident Corporation
▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
423.755.1011
Unum is the marketing brand of UnumProvident Corporation
Amendment To Marketing Contract
Whereas, Unum Life Insurance Company of America and its affiliates ("Unum")
and USI Insurance Services Corp. ("USI") entered into a Marketing Contract dated
January 1, 2000;
Whereas, Unum and USI desire to amend the Marketing Contract;
Now, therefore, in consideration of mutual covenants, agreement and
promises hereafter contained, Unum and USI agree as follows:
1) This Amendment is effective January 1, 2000 as to the CISCO System,
Inc. group term life case, policy numbers 25713 and 25714 and
effective September 1, 2000 as to the Triad Hospitals, Inc. long-term
disability case, policy number 25479. This Amendment applies only to
the above-referenced cases and policies.
2) A 4% flat marketing service fee will be paid to USI on the CISCO
System, Inc. group term life case, policy numbers 25713 and 25714 and
the Triad Hospitals, Inc. long-term disability case, policy number
25479 as of the effective dates noted above. No other compensation
will be paid to USI other than the 4% marketing service fee, and the
4% marketing service fee will only be paid to USI under the following
conditions:
a) CISCO System, Inc. and Triad Hospitals, Inc. remain Unum cases;
and
b) Strategic Benefit Planning of Houston, Texas remains the broker
of record on both cases; and
c) If there is a rate change up to and including the renewal date of
January 1, 2003 for CISCO System, Inc. and a renewal date of May
12, 2001 for Triad Hospitals, Inc., Unum reserves the right to
renegotiate the marketing service fee.
3) Unless expressly modified by this Amendment, all terms and conditions
in the Marketing Contract shall remain in effect.
In Witness Whereof, Unum and USI have caused this Amendment to be signed by
their duly authorized officers.
Unum Life Insurance Company
of America and its affiliates USI Insurance Services Corp.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇ By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------- ------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇ Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: V.P. National Marketing Org. Title: President & COO
Date: 10/30/00 Date: 10/18/00
Amendment To Marketing Contract
By and Between
Unum Life Insurance Company of America
and its affiliates ("Unum") and
USI Insurance Services Corp.,("USI")
The Marketing Contract executed by and between Unum and USI effective
January 1, 2000 ("Contract") is hereby amended effective January 1, 2001 as
follows:
The attached Net Allowance Schedule for USI replaces any schedules attached
to the Contract.
Except as provided herein, the Contract shall be unchanged and remain in
full force and effect.
In Witness Whereof, the parties hereto have set their hands and seals.
Unum Life Insurance Company
Of America and its affiliates USI Insurance Services, Corp.
By: /s/ Illegible By: /s/ ▇▇▇▇ ▇▇▇▇▇▇
------------------------- ----------------------------
Name: Illegible Name: ▇▇▇▇ ▇▇▇▇▇▇
Title: Illegible Title: PRESIDENT & COO
Date: Illegible Date: 6/26/01
EXHIBIT A
NET ALLOWANCE SCHEDULE
FOR
USI INSURANCE SERVICES CORP.
INDIVIDUAL DISABILITY INCOME PRODUCTS
-------------------------------------
Marketing Service Fees:
-----------------------
An Individual Disability Income Marketing Service Fee will be paid based on
total paid first-year IDI comissionable premium sold by USI Insurance Services
Corp. and accepted by UNUM Life Insurance Company of America and its affiliates
herein referred to as the "Company" according to the following schedule:
-------------------------------------------------------
Total Paid First-Year IDI Renewals
Commissionable Premium First Year Rate Year 2-10
-------------------------------------------------------
First $1,000,000 10.0% 2.0%
-------------------------------------------------------
Next $1,000,000 13.0% 2.0%
-------------------------------------------------------
Next $1,000,000 17.0% 2.0%
-------------------------------------------------------
Next $1,000,000 19.0% 2.0%
-------------------------------------------------------
Over $4,000,000 21.0% 2.0%
-------------------------------------------------------
.. When the total paid first-year IDI commissionable premium equals any of the
listed thresholds, the higher first-year IDI Marketing Service Fee will be
paid on the incremental paid first-year IDI commissionable premium.
.. Production related to Accident Income Recovery (Policy Form 475) and
Essential Disability Protection (EDP) will apply in calculating the total
paid first-year IDI commissionable premium; however, IDI Marketing Services
Fees will not be paid on these products.
.. Amounts paid to producers associated with USI Insurance Services Corp.
under the Premier Bonus program (or any successor or replacement program)
will be deducted from Marketing Service Fees otherwise payable to USI
Insurance Services Corp.
1/29/2001
EMPLOYEE BENEFITS PRODUCTS
--------------------------
Marketing Service Fees:
-----------------------
An Employee Benefits Marketing Service Fee will be paid based on total paid
first-year Employee Benefits commissionable premium sold by USI Insurance
Services Corp. and accepted by the Company according to the following schedule:
A. Base Amount: A guaranteed payment amount of 1.0% of new annualized
first-year Employee Benefits premium.
B. Block Management Bonus: See the following schedule.
---------------------------------------------------------------------------
New Sales*
---------------------------------------------------------------------------
Premium Persistency
Requirement
Beginning Inforce
1/1/2001 $13,000,000 $15,000,000 $17,000,000 $19,000,000
Year End Inforce to to to or
12/31/2001 $14,999,999 $16,999,999 $18,999,999 more
---------------------------------------------------------------------------
87% to 89.99% 0.0% 0.5% 1.5% 2.0%
---------------------------------------------------------------------------
90% to 92.99% 1.0% 1.5% 2.0% 2.75%
---------------------------------------------------------------------------
93% to 95.99% 1.5% 2.0% 2.75% 3.75%
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96% and above 2.0% 2.75% 3.75% 5.0%
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* New Sales thresholds will be adjusted annually based on sales goals
established by the Company
.. Amounts paid to producers associated with USI Insurance Services Corp.
under the Premier Bonus program (or any successor or replacement program)
will be deducted from Marketing Service Fees otherwise payable to USI
Insurance Services Corp.
.. A pro-rata refund must be made to the Company for any Marketing Service
Fees on premiums refunded for any reason, at the same rate at which
Marketing Service Fees were originally paid.
.. For purposes of this Schedule, Persistency is defined as a fraction, the
denominator of which is "Beginning Inforce", as defined herein, and the
numerator of which is "Year End Inforce", as defined herein. The resulting
fraction shall be expressed as a percentage, rounded to the nearest
hundredth of a percent.
For the purposes of this Schedule, Beginning Inforce shall mean the
aggregate annualized Product premium from cases that are in force on
January 1 of the calendar production year, and on which a USI Insurance
Services Corp. representative is the designated "Broker-of-Record", as
defined herein.
For the purposes of this Schedule, Year End Inforce shall mean "Beginning
Inforce" minus the aggregate annualized Product premium which is lost from
Beginning Inforce during the calendar production year due to termination,
cancellation, or other discontinuance of insurance, and excluding any new
Product premium produced in such calendar production year.
For the purposes of this Schedule, Broker-of-Record shall mean the broker
designated by the policyholder or contract holder and recognized by the
Company as entitled to receive commissions or service fees on a policy or
contract to which this Schedule applies.
.. Marketing Service Fees will not be paid on Employee Benefits plans written
on an ASO financing arrangement, Mini Plans or Broker-of-Record changes.
.. Marketing Service Fees will not be paid on Employee Benefit Reserve
buyouts.
.. Employee Benefit cases which migrate between companies in the UNUM group
will not count as new business for allowance/compensation purposes.
VOLUNTARY BENEFITS PRODUCTS
---------------------------
Marketing Service Fees:
-----------------------
A first-year Voluntary Benefits Marketing Service Fee will be paid based on
total annualized first-year commissionable VB premium sold by USI Insurance
Services Corp. and accepted by the Company according to the following schedule:
----------------------------------------------
Total Annualized First-Year
Commissionable VB Premium First Year Rate
----------------------------------------------
First $500,000 1.00%
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Next $400,000 2.75%
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Next $600,000 4.75%
----------------------------------------------
Over $1,500,000 6.75%
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.. When the total annualized first-year commissionable VB premium sold equals
any of the listed thresholds, the higher first-year Voluntary Benefits
Marketing Service Fee will be paid on incremental total annualized
first-year commissionable VB premium.
.. Amounts paid to producers associated with USI Insurance Services Corp.
under the Top Tier program (or any successor or replacement program) will
be deducted from Marketing Service Fees otherwise payable to USI Insurance
Services Corp.
.. The Company will be due a pro-rata refund of the first-year Marketing
Service Fees on premiums refunded for any reason at the same rate at which
the Marketing Service
Fees were originally paid.
INDIVIDUAL LONG TERM CARE PRODUCTS
----------------------------------
Marketing Service Fees:
-----------------------
An Individual Long Term Care Marketing Service Fee will be paid based on total
paid first-year ILTC commissionable premium sold by USI Insurance Services Corp.
and accepted by the Company according to the following schedule:
---------------------------------------------------------
Total Paid First-Year ILTC Renewals
Commissionable Premium First Year Rate Years 2+
---------------------------------------------------------
First $250,000 2.0% 0.0%
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Next $250,000 4.0% 0.0%
---------------------------------------------------------
Next $250,000 6.0% 0.0%
---------------------------------------------------------
Next $250,000 8.0% 0.0%
---------------------------------------------------------
Over $1,000,000 10.0% 0.0%
---------------------------------------------------------
.. When the total paid first-year ILTC commissionable premium equals any of
the listed thresholds, the higher first-year ILTC Marketing Service Fee
will be paid on the incremental paid first-year ILTC commissionable
premium.
.. For purposes of computing the Marketing Service Fee payable on ILTC
premiums paid on policies with an Accelerated Premium Option rider, only
sixty percent(60%) of such premiums shall count as paid premium.
.. Amounts paid to producers associated with USI Insurance Services Corp.
under the Prestige Bonus program (or any successor or replacement program)
will be deducted from Marketing Service Fees otherwise payable to USI
Insurance Services Corp.
GENERAL PROVISIONS
l. Marketing Service Fees on temporary flat extra premiums, waived premiums,
forgiven premium, discontinued/suspended premiums, internal rollovers,
policy or administrative fees, or on the amount of permanent table-rated or
percentage-rated premiums will be payable only as provided in the Company's
then current rules and practices.
2. Unless provided otherwise, Marketing Service Fees payable on supplementary
benefits will be at the same rates and subject to the same provisions as
the policies to which they are attached.
3. On any policy eligible for discount(s), Marketing Service Fees payable
shall be based on the actual premiums paid.
4. If this Contract is terminated, the applicable first year and renewal
Marketing Service Fees which are otherwise payable on premiums received by
the Company shall be continued only through the tenth policy year.
5. The unearned portion of any Marketing Service Fees paid to USI Insurance
Services Corp. under a policy that has been terminated prior to the first
policy anniversary date will be charged back to USI Insurance Services
Corp. as an indebtedness to the Company.
6. Marketing Service Fees payable on policy changes, made-over policies, or
policies being replaced by a new policy will be determined by the Company
in accordance with its then current rules and practices.
7. The Company reserves the right to withdraw products or product lines from
any and all jurisdictions at any time. The Company may introduce new
products from time to time. Compensation rates on such products will be
established at the time of product introduction. Such rates may differ from
rates published in this schedule.
8. For policies with issue ages 65 and above, Marketing Service Fees will be
determined by the Company in accordance with its then current rules and
practices.
9. Compensation rates may vary in some states due to regulatory requirements.
Premiums received on policies issued in such states shall earn compensation
as set forth in separate schedules.