AGENT MARKETING AGREEMENT
BETWEEN
UNITED HEALTHCARE OF UTAH,
UNITED HEALTH AND LIFE INSURANCE COMPANY
AND
Fringe Benefit Analysts, LLC
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(NAME OF CORPORATION)
CORPORATE BROKERAGE AGREEMENT
THIS AGREEMENT, made as of this 1st day of November, 1998, between
United HealthCare of Utah ("HMO"), a health maintenance organization, and United
Health and Life Insurance Company ("Insurance Company") (collectively known as
"Plans"), and Fringe Benefit Analysts, LLC ("Broker"),
WHEREAS, HMO is organized and operated as a health maintenance
organization to arrange for the delivery of health care services to persons
covered by HMO's group health benefit contracts; and
WHEREAS,Insurance Company is organized and operated as a life and
health insurance company licensed in the State of Utah; and
WHEREAS, Broker is a duly licen$ed insurance broker qualified to
solicit enrollment of persons in the group HMO enrollment, group health,
disability, and life insurance offered by or through Plans; and
WHEREAS, Plans and Broker desire to contract with each other to arrange
for Plans' group HMO benefit contracts and group health, disability, and life
insurance to be offered to specified groups of individuals;
NOW, THEREFORE, in consideration of the premises and mutual covenants
of this Agreement, Plans and Broker agree as follows;
SECTION I. DEFINITIONS.
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For the purposes of this Agreement:
"Broker" means the above-named individual broker/agency who:
1. is duly licensed pursuant to Utah law;
2. is approved by Plans to solicit enrollment of Enrolling Units under
this Agreement;
3. has executed this Agreement with Plans to solicit enrollment of
Enrolling Units under this Agreement; and
4. is Broker of Record for the Enrolling Unit.
"Benefit Contract" means the health, disability, and life benefit contracts and
policies approved by Plans to be marketed and issued to Enrolling Units under
this Agreement at premium rates established and approved by Plans.
"Broker Commissions" means che payments due Broker by Plans for the services
performed by Broker under this Agreement for an Enrolling Unit. The Broker
Commissions shall be calculated and paid as provided for in the Commission
Schedule to the Brokerage Agreement, attached hereto and incorporated herein,
("Appendix A").
"Contract Month" and "Contract Year" means the calendar month or year as
determined from the effective date of the Enrolling Unit under a Benefit
Contract.
"Defined Service Area" means the geographic area in which Broker may solicit
enrollment ofEnroliin" Units under this Agreement and limited to the counties in
which HMO and/or Insurance Company and Broker are licensed to operate.
"Enrolling Unit" means an employer group solicited under this Agreement which:
1. is located in the Defined Service Area;
2. has at least 5 employees eligible for group health benefits; and
3. is approved by Plans and accepted for enrollment under a Benefit
Contract.
SECTION II. AUTHORITY OF BROKER.
--------------------------------
A. Authority of Broker ^ Broker shall solicit enrollment of Enrolling Units
under this Agreement. Plans may from time to time adjust the minimum
Enrolling Unit sizi; it will accept for enrollment. Any such adjustment
shall be communicated to Broker on a timely basis.
B. Responsibilities of Broker. Broker shall be responsible for completion
of initial and ongoing training with Plans to assure compliance by
Broker with Plans' marketing and enrollment policies. Such training
shall include, but is not limited to, open enrollment training, sales
call training, routine evaluation of Broker's performance under this
Agreement and such other training as may be required by Plans from time
to time.
SECTION UT. SOLICITATION ANT) ENROLLMENT OF ENROLLING UNITS.
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A. Solicitation of Enrolling. Units. Broker shall use its bes: efforts to
solicit enrollment of prospective Enrolling Units under this Agreement;.
B. Proposals. Broker shall submit to prospective Enrolling Units proposal
letters in a form and upon such terms as are approved in advance by
Plans. No term of such proposal, including premium amounts, may be
altered except upon the prior written approval of Plans.
C. Application For Enrollment. Broker shall accurately and completely
record information required by Plans for enrollment of Enrolling Units
under a Benefit Contract and shall comply with applicable policies and
procedures as established by Plans from tune to time.
D. Acceptance for Enrollment. Plans shall have the right to accept or
reject any prospective Enrolling Unit submitted for enrollment by Broker
based on underwriting and enrollment policies established by Plans. In
no event shall any prospective Enrolling Unit be eligible to receive
health services under a Benefit Contract unless and until accepted by
Plans with such effective date as determined by Plans.
E. Servicing of Enrolling Units. Broker shall be responsible for the
delivery and explanation of initial administrative forms, such zs
billing and enrollment materials, and subsequent renewal forms, as
aoproved in advance by Plans. Broker shall deliver the Benefit Contract
with Enrolling Units for signature and return signed forms to Plans.
Broker is also responsible for each renewal presentation, as approved in
advance by Plans.
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F. Compensation for Services Rendered. Broker shall be compensated for
services rendered under this Agreement pursuant to Appendix A and shall
be compensated only ifrhs Broker continues to be recognized by the
Enrolling Unit as the Broker of Record.
G. Marketing Materials. Broker shall obtain from Plans, upon request by
Broker, such marketin"' and enrollment materials as are necessary for
solicitation of enrollment under this Agreement by Broker.
H. Use of Information. Broker shall not use any marketing materials or
other information regarding Plans to the competitive advantage of any
health benefits competitor of Plans. All such materials provided to
Broker shall bs immediately returned to Plans upon termination of this
Agreement.
I. Records. Broker shall maintain records related to the enrollment of
Enrolling Units by Broker, and. Plans shall, upon reasonable notice and
demand, have access during regular business hours to any records
maintained by Broker relating to this Agreement.
SECTTQN IV. TERMS AND CONDITIONS GOVERNING RELATTONSKTP BETWEEN PARTIES.
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A. Independent Contractors. Broker shall remain at all times an independent
contractor and not an employee of Plans. None of the provisions of this
Agreement are intended to create, nor shall be deemed or construed to
create, any other relationship between the parties. No employee of Plans
or Broker shall be construed or deemed to be an employee of the other
party.
B. Indemnification and Hold Harmless by Broker. Broker shall defend, hold
harmless and indemnify Plans against any and all claims, liabilities,
damages or judgments, including reasonable attorney's fees, asserted
against, imposed upon and/or incurred by Plans that arise out of the
acts or omissions, including negligence of Broker or other persons
within Broker's control, in the discharge of his/her or their
responsibilities under this Agreement.
C. Indemnification and Hold Harmless by Plans. Plans shall defend, hold
harmless and indemnify Broker against any and all claims, liabilities,
damagss or judgmenis, including reasonable attorney's fees, asserted
against, imposed upon and/or incurred by Broker that arise out of the
acts or omissions, including negligence of Plans employees or other
persons with'm Plan's control, in the discharge of his/her or their
responsibilities under this Agreement. o
D. Liability Insurance. Broker shall procure and maintain errors and
omissions and/or professional 1; o,illty insurance with coverage
satisfactory to Plans. Upon request by Plans. Broker shall provide
evidence of such insurance coverage. Broker shall notify Plans in
writing, to the attention of the Chief Executive Officer and President,
as appropriate, wilhin thirty (30) days prior notice of any material
changes in the errors and omissions or professional liability coverage.
SECTION V. RESOLUTION OF DISPUTES.
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A. Disputes. For the purposes of this section, "Disputs" means any dispute
or claim between Plans and Broker arising out of or related to the
interpretation or application of this Agreement or breach thereof.
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B. Negotiation and Arbitration ofDispuies. Resolution of any Dispute shall
be subject to good faich negotiation between the parties. The
complaining party shall notify the other party in writing of such
Dispute and the parties shall attempt to resolve the Dispute within
ninety (90) days of the date such notice, or within such time as is
mutually agreed upon by the parties in writing. In the event the Dispute
is not resolved within such time period, it shall be submitted in
writing to arbitration by the originating party within fifteen (15) days
of the termination of the negotiations as provided above pursuant to the
Commercial Arbitration Rules of the American Arbitration Association,
except that the arbitrators) shall be required to issue wrinen findings
of fact and conclusions of law in conjunction with any award and the
conclusions of law may be reviewed de novo if the award is challenged in
a subsequent judicial proceeding. This provision shall survive
termination of this Agreement.
SECTION VT. TERM. TERMINATION. AMENDMENT. ASSIGNMENT. ENTIRE
AGREEMENT AND GOVERNING LAW.
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A. Term. The term of this Agreement shall commence on the date first
specified above and shall continue in effect through the remainder of
the calendar year and for each calendar year thereafter until such time
as this Agreement is terminated by either party as provided for in
Section VI(B) hereof.
B. Termination. This Agreement may be terminated, with or without cause, by
either party to this Agreement upon sixty (60) days written notice to
the other party; provided, however, that termination of this Agreement
shall be subject to the following provisions:
1. In the event Lhis Agreement is terminated by Plans, without cause,
or by Broker with or without cause, Plans shall pay Broker
Commissions as provided in Section III of Appendix A until Broker
is no longer Broker of Record with the Enrolling Unit.
2. In the event this Agreement is terminated by Plans, with ceuse, no
Broker Commissions shall be payable to Broker by Plans following
the date of such termination. For the purposes of tnis Agreement
"with cause" shall mean default, by Broker under any material term
of [his Agreement and failure to cure such default within
forty-five (45) days after receipt of written notice from Plans
specifying the precise nature of such default.
3. In the event Broker is no longer duly licensed pursuant to Utah
law. Plans shall terminate this Agreement, and this shall be deemed
termination "with cause." In addition, if Broker is suspended or
disciplined by any state or federal regulatory audiority, or is
reprimanded in any way in connection with performance of his or her
duties as an insurance broker. Plans reserve the right, in its sole
discretion, to terminate this Agreement. Such termination shall be
deemed termination "with cause" under the terms of this Agreement.
No Broker Commissions shall be payable to Broker by Plans following
the date of such termination.
4. The determination of Contract Years for the purposes of calculating
Broker Commissions, as specified in Appendix A, upon termination of
this Agresmsnt, shall not bs affected by the termination of Lhis
Agreement and shall be determined from the effective date of the
Enrolling Unit under a Benefit Contract.
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C. Entire Agreement. This Agreement, including all appendices, constitutes
the entire agreement between the parties, superseding all prior
agreements, understanding and representations. No alterations of this
Agreement or waiver of its provision shall bs valid unless approved in
writing in advance by Plans.
D. Amendment. Except as otherwise provided In Section III. A. of Appendix
A, any amendment to this Agreement proposed by Plans at least sixty (60)
days prior to the effective date of such amendment shall be deemed
adopted unless this Agreement is earlier terminated as provided for m
Section VI(B). Any amendment to Appendix A shall apply to Enrolling
Units effective or renewed under a Benefit Contract on or after the
effective date of such amendment.
E. Assignment. HMO and Insurance Company shalS have the right to assign any
or all of its rights and responsibilities under this Agreement to any
entity that controls, is controlled or managed by, or is under common
control with HMO or Insurance Company as appropriate. Broker shall not
have the right to assign any or all of its rights and responsibilities
under this Agreement.
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F. Governing Law. This Agreement shall be governed by and construed in
accordincs with the laws of the State of Utah,
IN WITNESS WHEREOF, the parries have caused this Agreement to be duly
executed as of the date and year first written.
UNITED HEALTHCARE OF UTAH Fringe Benefit Analysts, LLC
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HMO CORPORATE ▇▇▇▇▇▇
By (signature illegible) By /s/ ▇▇▇▇▇ ▇▇▇▇
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Its CFO Its Manager
11/25/98 Federal Tax ID# ▇▇-▇▇▇▇▇▇▇
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Date November 3, 1998
--------------------------------
Date
UNITED HEALTH AND LIFE
INSURANCE COMPAQ
By
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Its Director, Contracts
Date
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COBROKER.GEN
03/15/91
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APPENDIX A
COMMISSION SCHEDULES TO
THE BROKERAGE AGREEMENT
SECTION I. DEFINTTTONS.
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For the purposes of this Appendix.
"Annual Contract Charges" means the Contract Charges collectible from an
Enrolling Unit during each Contract Year. Such amount shall be the total premium
amount collected from the Enrolling Unit for each Contract Year following its
effective or renewal date.
"Contract Charges" means the toial premium amount required of and collected from
an Enrolllng Unit for all health products or for all life, short-term
disability, and accidental death and dismemberment products for coverage under
Benefit Contracts.
"First Year Commission" means the Commissions due Broker for the first Contract
Year of enrollment of the Enrolling Unit by Broker under this Agreement.
"Monthly Contract Charges" means the Contract Charges collectible from an
Enrolling Unit during each o Contract Month. Such amount shall be the premium
amount collected from the Enrolling Unit for each Contract Month following its
effective or renewal date.
"Renewal Commission" means the Commissions due Broker for the second and
subsequent Contract Years of enrollment of the Enrolling Unit by Broker under
this Agreement.
SECTION II. TERMS AND CONDITIONS.
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A. Calculation of Commissions. Commissions payable to Broker pursuant to
Section III hereof shall be calculated as a percentage of Monthly
Contract Charges.
3. Timing of Payment of Proper Ccmmissions. Comissions payable pursuant to
Section III hereof shall be paid to Broker on a monthly basis no later
than sixty (60) days after the Enrolling Unit's Monthly Contract Charges
which are due have been received by Plans.
C. Clerical Error. PSars shall make an appropriate adjustment in Broker
Commissions, as provided in this Appendix, upon discovery of a clerical
error. This includes the Plans' right to collect reimbursement, from
Broker for any overpayment of Broker Commissions. However, no such
adjustment in Broker Commissions shall be made beyond fifteen (15)
monihs after the date Plans were notified of such clerical error. Plans
may collect reimbursement for collection agency and legal fees, if any,
incurred by Plans to procure reimbursement.
SECTION III. BROKER COMMISSIONS PAYABLE.
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A. Broker Compensation. For Enrolling Units solicited by Broker and
approved for .enrollment by Plans during the term of this Agreement,
Broker shall be compensated pursuant to the commission schedule in this
Appendix as amended from time to time by Plans upon thirty (30) days
written notice to Broker. Broker shall be compensated for an Eoroiling
Unit's first Contract Year and for subseausnt Contract Years; provided,
however, that no Broker Commissions shall be due and payable in the
event that this Agreement is terminated with cause by Plans. No Broker
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Commissions shall be due and payable in the event Broker is no longer
the Broker of Record for the Enrolling Unit iu accordance wiA the Plans'
Broksr of Record policy. In the event this Agreement is terminated
without cause. Broker Conimissior^ shall ba due and cavab'is In
accordance with Section VI.B. of this Agreement and with the schedules
set forth below.
B. Maintenance of Payment of Contract Charges. For an Enrolling Unit to be
included as an Enrolling Unit for purposes of determining the Broker
Commission Level payable pursuant to Section III(A) of this Appendix,
the Enrolling Unit must pay its Contract Charges on a timely basis.
C. Amount Payable. No amounts shall be payable hereunder in excess of any
maximum prescribed by any applicable federal or state law, regulation or
ruling.
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LIFES, STD & AD & D PRODUCTS
BROKER COMMISSION LEVELS TO
THE BROKERAGE AGREEMENT
FOR
NEW AND RENEWAL BUSINESS FOR
LIFE, SHORT-TERM DISABILITY AND
ACCIDENTAL DEATH AND DISKEMBERMENT PRODUCTS
First Year and Renewal Schedule Commission Percentage
t
First $15,000 of Annual Contract Charges: 10.0%
From $15,001 to $30/000 of Annual Contract Charges: 7.5%
From $30,001 to $50,000 of Annual Contract Charges: 5%
From $50/001 to $100,000 of Annual Contract Charges: 2%
From $100,001 ofco $250,000 of Annual Contract Charges: 1.0%
From $250,001 to $500,000 of Annual Contract Charges: .5%
From $500,001 to $1,000/000 of Annual Contract Charges: .5%
From $1,000/001 to $2,000,000 of Annual Contract Charges: .25%
From $2,000,001 to ?4, COO, 050 c? A.nnual Contract Charges: .125^
From $4,000,001 to $8,000,000 of Annual Contract Charges: .0625%
Over $8,000,001 of Annual Contract Charges: Home Office
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HEALTH PRODUCTS
BROKER COMMISSION LEVELS TO
THE BROKERAGE AGREEMENT
FOR
NEW AND RENEWAL BUSINESS
FOR ALL HEALTH PRODUCTS
WITH AN EFFECTIVE DATE OF SEPTEMBER, 1990
AND PRIOR TO THAT EFFECTIVS DATE.
Enrolling Units with less than 25 Eligible Employees: 10% Commission
Enrolling Units with 25 - 49 Eligible Employees: 7% Commission
Enrollind Units with 50 - 100 Eligible Employees: 5% Commission
Enrolling Units with 101+ Eligible Employees: Negotiated
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