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EXHIBIT 10.34
COINSURANCE AGREEMENT
THIS COINSURANCE AGREEMENT is made and entered into by and between SAVERS
LIFE INSURANCE COMPANY, a North Carolina domestic health insurance company of
Winston-Salem, North Carolina, referred to herein as "Savers" or the "Ceding
Company" and WORLD INSURANCE COMPANY, a Nebraska domestic health insurance
company of Omaha, Nebraska, referred to herein as "World".
WHEREAS, Savers has issued certain individually underwritten health and
accident insurance policies, which are more specifically described hereinafter
in Exhibit A; and
WHEREAS, subject to the terms and conditions hereinafter set forth, Savers
desires to cede and reinsure to World, and World desires to coinsure from
Savers, the Ceding Company, on a 100% coinsurance basis the policies referred to
in Exhibit A, attached hereto and by reference made a part hereof.
NOW, THEREFORE, in consideration of the premises and the mutual promises of
the parties hereto, they hereby covenant and agree as follows.
ARTICLE 1
EFFECTIVE DATE
1.1 DATE. This Coinsurance Agreement shall be effective as of 12:01 a.m. on
July 1, 1997, which time and date shall be referred to herein as the "Effective
Date".
ARTICLE 2
COINSURED POLICIES/REPRESENTATIONS OF PARTIES
2.1 DESCRIPTION OF COINSURED POLICIES. Subject to the provisions of
Paragraph 5.1 below, the Ceding Company hereby assigns, transfers, sets over,
cedes and reinsures to World, and World hereby reinsures on a 100% coinsurance
basis from the Ceding Company, together with all rights, duties, risks,
liabilities and obligations relating thereto and all reserves and unpaid claims
existing at the Effective Date, those policies described in Exhibit A hereof,
referred to herein as the "Coinsured Policies".
2.2 REPRESENTATION OF POLICIES BY CEDING COMPANY. Ceding Company represents
to the best of its knowledge and belief that the Coinsured Policies described in
the attached Exhibit A are the only policies to be covered by this Coinsurance
Agreement plus any policies reinstated by the Ceding Company before the
Effective Date. The parties hereto agree that they shall make appropriate
adjustments between themselves with respect to any such reinstated policies.
2.3 OTHER REPRESENTATIONS OF CEDING COMPANY. The Ceding Company represents
to the best of its knowledge and belief, that the representations below are true
and correct as of the Effective Date and shall also be true and correct as of
the Closing Date:
a. Except for any outstanding and effective reinsurance treaties, no
person, firm or corporation has any claims, liens, judgments or right of
action, legal or equitable, against or in any assets transferred to World
under the terms of this Coinsurance Agreement.
b. The Coinsured Policies/Forms as set forth in Exhibit A attached
hereto are in force.
c. The Ceding Company is a corporation duly organized and validly
existing in good standing under the laws of the State of North Carolina and
is in good standing as an authorized insurer in each jurisdiction where it
requires such qualification. Ceding Company has the corporate power and
authority to carry on its business substantially as it is now being
conducted.
d. The Coinsured Policies/Forms set forth in Exhibit A hereof were
written, issued and maintained in full compliance with state and federal
laws and regulations.
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e. The Ceding Company has the requisite corporate power and authority
and has taken all corporate action necessary to execute and deliver this
Coinsurance Agreement and to consummate the transactions contemplated
hereby. This Coinsurance Agreement has been validly executed and delivered
by the Ceding Company and is a valid and binding agreement of the Ceding
Company, enforceable against the Ceding Company in accordance with its
terms.
2.4 REPRESENTATIONS OF WORLD. World represents to the best of its knowledge
and belief, that the representations below are true and correct as of the
Effective Date and shall also be true and correct as of the Closing Date:
a. World is a corporation duly organized and validly existing in good
standing under the laws of the State of Nebraska and is in good standing as
an authorized insurer in each jurisdiction where it requires such
qualification. World has the corporate power and authority to carry on its
business substantially as it is now being conducted.
b. World has the requisite corporate power and authority and has taken
all corporate action necessary to execute and deliver this Coinsurance
Agreement and to consummate the transactions contemplated hereby. This
Coinsurance Agreement has been validly executed and delivered by World and
is a valid and binding agreement of World, enforceable against World in
accordance with its terms.
2.5 COINSURANCE BASIS. Savers and World acknowledge and agree that the
reinsurance provided herein is on a 100% coinsurance basis. World agrees to
assume, carry out and perform all of the duties, obligations and liabilities
under the Coinsured Policies, subject, however, to the same rights, offsets,
counter-claims, cross-actions and defenses that are or may be possessed by
Savers, the Ceding Company. It is expressly understood that no such offsets,
counter-claims, cross-actions or defenses are or shall be waived, but that the
same are expressly preserved and that World shall be duly subrogated thereto,
whether the same be known to exist or are hereafter discovered.
2.6. PREMIUM PAYMENT, NEGOTIATION OF CHECKS. Upon and after the Effective
Date, (i) all premium payments under the Coinsured Policies shall be the sole
property of World and not of any liquidator, rehabilitator, receiver or other
statutory successor of Savers; and (ii) any premium payment received by Savers
shall be promptly remitted to World without diminution on account of the
insolvency of Savers. After the Effective Date, World shall be authorized to
endorse for payment all checks, drafts and money orders payable to Savers with
respect to premiums payable on the Coinsured Policies. After the Effective Date,
Savers hereby assigns to World all of its rights and privileges to draft or
debit the accounts of any policyholders for premiums due under the Coinsured
Policies pursuant to existing pre-authorized bank draft or electronic fund
transfer arrangements between Savers and such policyholders.
ARTICLE 3
CLAIMS
3.1 HANDLING OF CLAIMS. As of the Effective Date and subject to the
provisions hereof, World does hereby assume all the rights, liabilities and
obligations of the Ceding Company, including, but not limited to, claims and
obligations of the Ceding Company as to the Coinsured Policies. At and after the
Effective Date, the Ceding Company shall have no liability except to the extent
otherwise specifically set forth herein, of any kind or character with respect
to the Coinsured Policies. Prior to the Effective Date, the Ceding Company is
responsible to investigate and pay, deny or settle and bear the expense
(including legal expenses) of all claims and any and all liability incurred
under the Coinsured Policies. World assumes no responsibility for any liability
of any kind, including claims, for actions taken by the Ceding Company prior to
the Effective Date.
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ARTICLE 4
LIABILITY
4.1 PRIOR TO EFFECTIVE DATE. The Ceding Company agrees to retain control of
and responsibility for any item of liability of itself or its agents or brokers
arising from any litigation, unfair practices complaints, insurance department
complaints or regulatory proceeding relating to any of the Coinsured Policies,
which was filed, asserted, alleged or arose prior to the Effective Date. Such
responsibility includes the Ceding Company being liable for all legal expenses
incurred after the Effective Date and all amounts payable in settlement of such
litigation or dispute or any judgment arising from the prosecution of such
litigation or dispute. The Ceding Company does hereby retain full obligation for
all agent commissions, production, persistency and other bonuses earned or
claims prior to the Effective Date with respect to the Coinsured Policies.
Similarly, the Ceding Company does hereby also retain all dividend obligations,
if any, related to the Coinsured Policies. Exhibit B contains all known claims
of this type.
4.2 AFTER EFFECTIVE DATE. World will be responsible for all payments to
agents due or to become due with respect to the Coinsured Policies generated or
earned subsequent to the Effective Date. This responsibility shall include, but
not be limited to, the calculation of commissions due, bonuses, payment thereof,
record-keeping, withholding and/or reporting as may be necessary and any and all
other acts required to properly pay, account for and report all payments to
agents. The Ceding Company and World shall cooperate with each other in the
exchange of information necessary for the payment and reporting of any such
payments.
4.3 RESOLUTION OF DISPUTES. The Ceding Company agrees as part of any
settlement of any such litigation or regulatory proceeding, to issue, reinstate,
continue, or place any policy in force, which policy would have been covered by
this Coinsurance Agreement. Such policy will be reinsured under this Coinsurance
Agreement when the litigation or regulatory proceeding has been resolved, the
parties have mutually agreed upon the appropriate reserve, if any, for such
policy to be transferred, and the appropriate reserve, if any, for such policy
has been transferred by the Ceding Company to World.
4.4 ACTIONS ON OR AFTER EFFECTIVE DATE. If any legal or regulatory actions
are threatened or filed in connection with any of the Coinsured Policies on or
after the Effective Date, the parties agree to provide each other with prompt
notice thereof, within such time period as would allow the appropriate party the
opportunity to answer, appear or to take any action necessary or to avoid a
default judgment. The parties agree to cooperate with each other with respect to
any legal or regulatory actions, whether threatened or actual.
4.5 TAXES. World shall have full responsibility for any tax liability
relating to the Coinsured Policies for all taxable periods or portions thereof
beginning after the Effective Date. World further agrees to maintain on and
after the Closing Date all reserves and liabilities on the Coinsured Policies as
required by the laws of the states which have jurisdiction over the Coinsured
Policies.
The Ceding Company shall be responsible for and shall pay all premium taxes
on the Coinsured Policies which accrue prior to the Effective Date. World shall
reimburse Ceding Company for all premium taxes paid by the Ceding Company on the
Coinsured Policies which accrued on or after the Effective Date and which were
paid by the Ceding Company.
The Ceding Company also agrees to provide necessary financial data to World
with regard to the Coinsured Policies, as of the Effective Date, to support
Federal Income Tax filing needs and requirements of World. Such information
should be consistent with information comparable to that used in Ceding
Company's 1995 and 1996 Federal Income Tax returns.
ARTICLE 5
ERRORS AND OVERSIGHTS
5.1 PROCEDURE. Each party to this Coinsurance Agreement will act reasonably
to comply with its terms. Clerical errors and oversights occasioned in good
faith in carrying out this Coinsurance Agreement will not prejudice either
party, and will be rectified promptly on an equitable basis.
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ARTICLE 6
TRANSFER OF FILES
6.1 CURRENT FILES. All original customer policy files and all policy
approval and medical review files or suitable copies thereof (in the form of
paper copies or on microfiche or in the form of electronically stored computer
data) relating to the Coinsured Policies, including but not limited to, files
containing information concerning sales, policyowner service, reinsurance
contracts, policy and form approval information, underwriting, policy issue
information, premiums, unearned premiums, return premiums, reserves and, if
requested by World, closed claims, shall be delivered by the Ceding Company to
World before the date the administration of the Coinsured Policies transfers
from the Ceding Company to World or at such other time and place as may be
mutually agreed to by the parties. All other claim files or all necessary claim
information shall be transferred to World by the Ceding Company on an as needed,
and as requested, basis.
6.2 CLOSED FILES. Copies of all closed claim files may be retained by the
Ceding Company and it agrees that World may copy, at its expense, any of the
files so retained or World may request that the Ceding Company provide to World
copies of such transferred files at World's expense. The retention of these
files by the Ceding Company shall be not less than four (4) years from the
Effective Date of this Agreement.
ARTICLE 7
ARBITRATION
7.1 DUTY OF ARBITRATOR. All differences between the Ceding Company and
World on which agreement cannot be reached will be settled by arbitration. The
arbitrator will determine the interpretation of this Coinsurance Agreement in
accordance with usual business and reinsurance practices rather than on a strict
technical and legal basis.
7.2 SELECTION OF ARBITRATOR. Unless otherwise agreed upon in writing by the
parties, an independent arbitrator will be appointed by the American Arbitration
Association or its successor organization. Rules and procedures of any such
arbitration shall be according to the latest rules of the American Arbitration
Association for commercial arbitration. The place of meeting will be Omaha,
Nebraska, unless otherwise agreed by the parties. Upon request from either
party, the arbitrator will issue his decision and the basis for such decision in
writing. There will be no appeal from the decision of the arbitrator.
7.3 GOVERNING LAW. The provisions of this article relate to all aspects of
this Coinsurance Agreement, including its formation and execution, and shall
survive the termination of this Coinsurance Agreement. The laws of the State of
Nebraska will govern all questions regarding the interpretation and application
of this Coinsurance Agreement in the event of arbitration.
7.4 EXPENSES. Each party will pay its own expenses of arbitration,
including the expenses of any outside attorney fee. The parties will share
equally the expenses of the arbitrator. Any other costs of the arbitration
proceedings will be paid by the party incurring such expenses unless otherwise
determined in writing by the arbitrator.
ARTICLE 8
COINSURANCE ALLOWANCE FOR COINSURED POLICIES
8.1 NET FINANCIAL TRANSFER AS OF JUNE 30, 1997. The closing and wire
transfer of proceeds for June 30, 1997 will occur no later than September 1,
1997 as follows:
1. Claim Reserve plus Claim Expense Reserve; plus
2. Active Life Reserve; plus
3. Eighty-eight percent (88%) of the Unearned Premium Reserve;
plus
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4. Interest Due (7%); plus
5. Advance Premium; less
6. Due Premiums (30 Days or Less Past Due)
Savers will pay World interest of seven percent (7%) per annum on the net cash
transferred (at closing) from the Effective Date to the Closing Date.
8.2 CLOSING DATE. The Closing Date is expected to be no later than
September 1, 1997. In the event the closing does not occur on September 1, 1997,
interest will continue to accrue at seven percent (7%) per annum.
8.3 SHORT TERM PROFIT/LOSS SHARING. World and Savers will share equally in
profits/losses for incurred loss ratios above or below seventy-five percent
(75%). The profit/loss agreement will be for six months from the effective date
of our agreement (July, 1997 through December 1997). A final settlement will be
made on the Profit/Loss sharing agreement in July of 1998.
a. Included in incurred claims used in the profit/loss sharing
agreement referenced above are paid claims for the reporting period, plus
the change in claim reserve, plus outside claim litigation expenses, plus
any cost of pre-certification or PPO services, plus any extra contractual
settlements or damages incurred from claims subject to the following
provisions:
1) Any extra contractual settlements or benefits paid out of
contract as a result of actions relating to claims with a date of loss
prior to the effective date of the Coinsurance Agreement and which were
handled by the Ceding Company would be the full responsibility of the
Ceding Company.
Items 2) through 5) relate to and define extra contractual settlements or
benefits paid out of contract relating to actions after the Effective Date
of the Coinsurance Agreement.
2) Any extra contractual settlements or benefits paid out of
contract which involve representations as to how the policy was sold or
serviced by a Savers agent would be included in the definition of
incurred claims used in the profit/loss sharing agreement.
3) Any extra contractual settlements or benefits paid out of
contract which involve erroneous handling of the claim or claim payment
procedures of World which are not considered reasonable will be the
responsibility of World. These extra contractual settlements or benefits
paid out of contract will not be included as incurred claims in the
profit/loss sharing agreement.
4) Any extra contractual settlements or benefits paid out of
contract which does not fall into 2) or 3) above and for which World did
follow procedures considered reasonable within the practices of the
medical insurance industry will be included as an incurred claim used in
the profit/loss sharing agreement.
5) In the event the Ceding Company and World cannot agree in which
category the extra contractual settlement or benefits reside, a single
arbitrator will be selected pursuant to Article 7 hereof.
b. Premiums and claims will be adjusted for all costs of reinsurance.
c. The claim reserve transferred at the Effective Date will be based
on a mutually agreed amount derived from claim run offs and claim histories
using an incurred date definition outlined in (f) below. Six months
following the Effective Date, the parties will agree on what the actual
claim reserve should have been and settle that difference along with
interest at seven percent (7%) per annum on the amount. This adjusted
reserve will be used in the calculation of the second quarterly profit/loss
sharing settlement.
d. The Ceding Company agrees to use its best efforts to allow World to
use the Savers PPO network currently in use for these blocks of business.
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e. Because of the ongoing profit/loss sharing arrangement, World
encourages any input by the Ceding Company regarding the management of
these blocks of business.
f. For purposes of setting the claim reserves, the definition of
incurred dates is the first date of service except for a continuous
hospital stay and in that case it is the first day of hospital confinement
for as long as hospitalization or its equivalent is required or
recommended. This incurred date definition applies to all claims and is not
limited to hospital stays.
g. The Ceding Company will assist in the conversion of the
administration and claims system to World's administration and claims
system.
h. In the event that the administration of these blocks of business is
transferred to World after the Effective Date of the Coinsurance Agreement,
World agrees to pay the Ceding Company $50,000 per month to administer the
block of business.
ARTICLE 9
CLOSING DATE
9.1 DATE. The Closing Date shall be as mutually agreed upon by the parties
hereto, but in no event, beyond sixty (60) days after the Effective Date of this
Coinsurance Agreement.
ARTICLE 10
TERMINATION
10.1 FAILURE TO OBTAIN APPROVALS. Termination of this Coinsurance Agreement
shall occur upon the failure of either party hereto to obtain the necessary
approvals of any appropriate state insurance departments. Also, if more than one
hundred twenty (120) days from the Effective Date of this Coinsurance Agreement
has elapsed without obtaining the necessary state insurance department
approvals, this Coinsurance Agreement shall terminate.
10.2 COSTS OF TERMINATION. Neither party shall be liable to the other for
any costs, expenses, causes of actions, fees or claims of any type due to
termination of this Coinsurance Agreement.
ARTICLE 11
APPROVALS BY PARTIES
11.1 APPROVAL OF PROCEEDINGS. All proceedings to be taken and all documents
to be executed and delivered by either party in connection with the consummation
of the financial transactions contemplated hereby shall be reasonably
satisfactory in form and substance to World and its counsel. All proceedings to
be taken and all documents to be executed and delivered by all parties at the
closing shall be deemed to have been taken and executed simultaneously and no
proceeding shall be deemed taken nor any documents executed or delivered until
all have been taken, executed and delivered. At the closing, each party shall
deliver to the other party any payments contemplated and agreed to and described
in this Agreement.
11.2 SAVERS ANNUAL STATEMENT. Within ninety (90) days following the Closing
Date, Savers shall have delivered to World a copy of Savers's NAIC Statutory
Annual Statements for the year ended December 31, 1997. World agrees that the
delivery thereof by Savers to World shall constitute Savers's representation and
warranty that such Annual Statements (i) have been prepared in accordance with
statutory accounting principles applied on a consistent basis during the periods
reflected therein, (ii) are in accordance with the books and records of Savers,
and (iii) fairly present the income, assets and liabilities of Savers as at and
for the year ended December 31, 1997.
11.3 WORLD ANNUAL STATEMENT. Within ninety (90) days following the Closing
Date, World shall have delivered to Savers World's NAIC Statutory Annual
Statement for the year ended December 31, 1997. Savers
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agrees that the delivery thereof by World to Savers shall constitute World's
representation and warranty that such Annual Statements (i) have been prepared
in accordance with statutory accounting principles applied on a consistent basis
during the periods reflected therein, (ii) are in accordance with the books and
records of World, and (iii) fairly present the income, assets and liabilities of
World as at and for the year ended December 31, 1997.
11.4 OTHER AGREEMENTS. The Ceding Company represents that there are no
contracts and agreements to which Savers is a party and which have a material
effect on the Coinsured Policies, except: National Health Services
(pre-certification and utilization review), Managed Care USA (preferred provider
organization), PMSC (policy administration system), PCS (prescription drug card
administration), and Medicode (outpatient U&C claims edit).
ARTICLE 12
REGULATORY APPROVALS
12.1 COMPLIANCE. The parties hereto agree to comply with all laws,
regulations or directions of insurance departments of their domiciled states
with regard to the content, description, timing or other such requirements with
regard to the notification to policyholders, the Coinsurance Agreement and all
service requirements to policyholders.
12.2 REGULATORY APPROVALS. If applicable, the Ceding Company shall obtain
any necessary regulatory approval of this 100% coinsurance transaction and the
Coinsurance Agreement from the State of North Carolina, and World shall obtain
any necessary regulatory approval of this Coinsurance Agreement from the State
of Nebraska. The parties agree that where formal approval is required by any
other state insurance regulatory agency, this Coinsurance Agreement shall not be
effective as to any and all Coinsured Policies in effect in such state until
such approval is obtained.
12.3 EFFECT OF NON-CONSENT OR NON-APPROVAL. In the event that a state
insurance regulatory agency disapproves this Coinsurance Agreement, then the
Ceding Company requests and World agrees that World will administer such
policies until such time as approval is obtained, but not longer than December
31, 1998.
ARTICLE 13
CONFIDENTIALITY
13.1 INFORMATION AFFECTED. The Ceding Company and World acknowledge that
they possess or will have access to confidential and proprietary information
concerning the manner in which the parties conduct their business, which
information is not readily available to the public, and acknowledge that the
parties have taken reasonable action to ensure such information is not disclosed
to the public. The parties agree that they will not at any time (during the term
hereof or thereafter) disclose to any person, corporation, partnership or other
entity whatsoever (except to one another and their affiliates and the officers,
directors, employees, and outside counsel of both parties and their affiliates,
and except as required by subpoena), directly or indirectly, any confidential
information or trade secrets relating to the business affairs of the parties,
including the identity of and/or the compensation arrangements with, any agents,
affiliates and subsidiaries of the parties so long as such information remains
confidential as required by applicable federal or state privacy laws.
ARTICLE 14
RELATIONSHIP OF PARTIES
14.1 NO EMPLOYMENT RELATIONSHIP. The relationships between the parties
hereto shall be that of independent contractors. Nothing herein shall be
construed to create the relationship of employer and employee between World, the
Ceding Company or any of their respective agents or home office employees.
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ARTICLE 15
NON-REPLACEMENT
15.1 TERM. The Ceding Company agrees for five (5) years following the
Effective Date of this Coinsurance Agreement that there will be no effort by the
Ceding Company to replace the Coinsured Policies. To the extent reasonably
possible the Ceding Company further agrees that it will discourage its agents
and brokers from replacing the Coinsured Policies.
ARTICLE 16
INDEMNIFICATION
16.1 BY CEDING COMPANY. Any indemnification rights of the Ceding Company
herein shall be subject to and in addition to the provisions of Article 4,
Liability, herein. The Ceding Company shall indemnify, defend and hold harmless
World and its affiliates and their directors, officers, employees and agents
from and against any and all claims (exclusive of any contractual benefits under
any Coinsured Policy), demands, actions, proceedings, damages, including
punitive, consequential or extra-contractual damages, losses, costs or expenses,
including reasonable attorneys' fees, relating thereto or otherwise arising out
of any act, error or omission resulting from the negligence, deceptive trade
practices, intentional misconduct or willful wrongdoing of Savers, its
directors, officers, agents or employees arising out of any of their performance
under this Coinsurance Agreement or in their administration of the Coinsured
Policies. The foregoing indemnification and hold harmless clause applies to any
liabilities, losses, fines, penalties, damages, costs and expenses, including
reasonable attorneys' fees, incurred by World resulting from Savers's failure to
administer the Coinsured Policies in compliance with Article 4 and Article 12
herein or as a result of any of the Coinsured Policies being found to be not in
compliance with a law or regulation prior to the Effective Date or prior to the
actual transfer of the administration of the Coinsured Policies from Savers to
World.
16.2 BY WORLD. World shall indemnify, defend and hold harmless Savers and
its affiliates and their directors, officers, employees and agents from and
against any and all claims, demands, actions, proceedings, damages, including
punitive, consequential or extra-contractual damages, losses, costs or expenses,
including reasonable attorneys' fees, relating thereto or otherwise arising out
of any act, error or omission resulting from the negligence, deceptive trade
practices, intentional misconduct or willful wrongdoing of World, its directors,
officers, agents or employees or arising out of their performance under this
Coinsurance Agreement. The foregoing indemnification and hold harmless clause
applies to any liabilities, losses, fines, penalties, damages, costs and
expenses, including reasonable attorneys' fees, incurred by Savers resulting
from World's administration of the Coinsured Policies subsequent to the actual
transfer of the administration of the Coinsured Policies from Savers to World.
ARTICLE 17
OTHER PROVISIONS
17.1 PARAGRAPH HEADINGS. The headings of the provisions of this Coinsurance
Agreement are for reference purposes and have no legal force or effect.
17.2 ENTIRE AGREEMENT. This Coinsurance Agreement embodies the entire
agreement between the parties. No modification, variation, amendment or change
will be binding on either party unless reduced to writing and signed by a duly
authorized officer of each of the parties.
This Coinsurance Agreement was made between the parties based upon the
attached Letter of Intent dated April 18, 1997, and addendum thereto dated May
30, 1997.
17.3 GOVERNING LAW. This Coinsurance Agreement shall be construed and
interpreted according to the laws of the State of Nebraska.
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17.4 OTHER ACTIONS. The Ceding Company and World will use their best
efforts to cause the reinsurance contemplated under this Coinsurance Agreement
to be consummated and approved by all necessary regulatory bodies, and to do
such further acts, matters and deeds, and execute any and all additional
instruments and agreements that may be mutually agreed as necessary or
reasonably required in order to carry this Coinsurance Agreement into full
effect.
17.5 NOTICES. Until otherwise notified, all formal notices, requests,
demands, and other communications between the parties shall be directed to the
parties at their respective addresses as follows:
"SAVERS" "WORLD"
CEDING COMPANY REINSURING COMPANY
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▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇, President ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Savers Life Insurance Company Vice President, Special Projects
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇. World Insurance Company
▇▇▇▇▇▇▇-▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Copy to: Copy to:
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▇▇. ▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, ▇▇. ▇▇. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Womble, Carlyle, ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇ Vice President & General Counsel
Attorneys at Law World Insurance Company
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇-▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
17.6 ASSIGNMENT. This Coinsurance Agreement is not assignable by either
party without prior written consent of the other party, and the prior approval
of any state insurance department, where required. Such consent shall not be
unreasonably withheld by the parties hereto.
17.7 WAIVER. Failure of the Ceding Company or World to enforce any of its
rights or remedies under this Coinsurance Agreement shall not constitute a
waiver of such rights or remedies exercisable hereunder.
17.8 SEVERABILITY. If any provision of this Coinsurance Agreement should be
determined to be invalid or otherwise unenforceable under law, the remainder of
this Coinsurance Agreement shall not be affected thereby.
17.9 AGREEMENT BINDING. This Coinsurance Agreement is binding upon the
parties hereto, their respective representatives, successors and assigns.
17.10 MULTIPLE COPIES. This Coinsurance Agreement may be executed in
multiple copies and each shall have the same force and effect of the original.
IN WITNESS WHEREOF, this Coinsurance Agreement has been duly executed.
CEDING COMPANY:
SAVERS LIFE INSURANCE COMPANY
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
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Title: President
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Date: May 30, 1997
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REINSURING COMPANY:
WORLD INSURANCE COMPANY
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
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Title: Vice President, Special Projects
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Date: May 30, 1997
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EXHIBIT "A"
COINSURANCE (100%) AGREEMENT
BETWEEN
WORLD INSURANCE COMPANY OF OMAHA, NEBRASKA
(REINSURING COMPANY)
AND
SAVERS LIFE INSURANCE COMPANY OF WINSTON-SALEM, NORTH CAROLINA
(CEDING COMPANY)
This Exhibit A is attached to and made a part of the Coinsurance Agreement
by and between Savers Life Insurance Company of Winston-Salem, North Carolina,
and World Insurance Company of Omaha, Nebraska.
The following individual health and accident policies constitute the
Coinsured Policies of this Coinsurance Agreement:
"Article 2, Coinsured Policies, 2.1 Description of Coinsured
Policies."
Major Medical policies of Savers to include the following plans: ▇▇▇▇,
▇▇▇▇, ▇▇▇▇, ▇▇▇▇ and MM96.
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EXHIBIT "B"
COINSURANCE AGREEMENT
BETWEEN
WORLD INSURANCE COMPANY OF OMAHA, NEBRASKA
(REINSURING COMPANY)
AND
SAVERS LIFE INSURANCE COMPANY OF WINSTON-SALEM, NORTH CAROLINA
(CEDING COMPANY)
This Exhibit B is attached to and made a part of the Coinsurance Agreement
by and between Savers Life Insurance Company of Winston-Salem, North Carolina,
and World Insurance Company of Omaha, Nebraska.
The responsibility of Savers for costs and expenses of litigation and
regulatory proceedings relating to the Coinsured Policies being transferred by
Savers, as more particularly set forth in "Article 4, Liability" of the
Coinsurance Agreement, are identified below as follows:
As of June 21, 1997, there is one (1) lawsuits on the Coinsured Policies.
There are seven (7) policies currently under litigation on the Coinsured
Policies/Forms listed on Exhibit A that will not be in force as of the Effective
Date and will be Savers responsibility.
Regarding the ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ case, claims will be paid according to the
contract. The expected liability on a yearly basis is $10,000.00. Any additional
liability up to to Savers current reinsurance retention amount ($100,000.00)
will be the responsibility of Savers.
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CLOSING AGREEMENT
TO
COINSURANCE AGREEMENT
BY AND BETWEEN
SAVERS LIFE INSURANCE COMPANY ("CEDING COMPANY")
AND
WORLD INSURANCE COMPANY ("REINSURING COMPANY")
DATED AS OF SEPTEMBER 1, 1997
With the execution of this Closing Agreement, without waiving any rights
the parties respectively may have in the event there has been a breach of any
representation and/or warrant given by either or both parties under the
Coinsurance Agreement, the parties hereby agree that the following items have
been completed by the applicable party as required by the Coinsurance Agreement:
1. The Coinsurance Agreement has been properly executed by the
parties.
2. All conditions precedent set forth in the Coinsurance Agreement
have been met.
In Witness Hereof, the parties hereto execute the same effective the 1st
day of September, 1997.
CEDING COMPANY:
SAVERS LIFE INSURANCE COMPANY
By:
-----------------------------------------------------
Its
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Dated
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REINSURING COMPANY:
WORLD INSURANCE COMPANY
By:
-----------------------------------------------------
Its Vice President, Special Projects
-------------------------------------------------
Dated
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