EXHIBIT 99.8(a)
ADMINISTRATIVE SERVICES AGREEMENT
This Administrative Services Agreement (this "Agreement") is made
effective as of 12:01 a.m., Eastern Standard Time, on the 1st day of January,
2001 ("Effective Date"), by and between THE MANUFACTURERS LIFE INSURANCE COMPANY
(U.S.A.) a Michigan stock insurance corporation ("Provider") and THE
MANUFACTURERS LIFE INSURANCE COMPANY OF NEW YORK, a New York stock life
insurance corporation ("Company").
WHEREAS, Company is currently receiving services pursuant to an
Administrative Services agreement effective as of the 1st day of October, 1997
between Company and THE MANUFACTURERS LIFE INSURANCE COMPANY (the "Prior
Agreement"); and
WHEREAS, Company wishes to terminate the Prior Agreement and desires
Provider to perform administrative and special services (collectively,
"services") for Company in its insurance operations and desires further to make
use in its day-to-day operations of certain property, equipment and facilities
(collectively, "facilities") of Provider as Company may request; and
WHEREAS, Provider and Company contemplate that such an arrangement
will achieve certain operating economies and improve services to the mutual
benefit of both; and
WHEREAS, Provider and Company wish to assure that all charges for
services and the use of facilities incurred hereunder are reasonable and in
accordance with the requirements of New York Insurance Department Regulation No.
33 and to the extent practicable reflect actual costs and are arrived at in a
fair and equitable manner, and that estimated costs, whenever used, are adjusted
periodically, to bring them into alignment with actual costs; and
WHEREAS, Provider and Company wish to identify the services to be
rendered to Company by Provider and the facilities to be used by Company and to
provide a method of fixing bases for determining the charges to be made to
Company:
NOW, THEREFORE, in consideration of the premises and of the mutual
promises set forth herein, and intending to be legally bound hereby, Provider
and Company agree as follows:
1. PERFORMANCE OF SERVICES AND USE OF FACILITIES. Subject to the
terms, conditions and limitations of this Agreement, Provider agrees to the
extent requested by Company to perform diligently and in a professional manner
such services for Company as Company determines to be reasonably necessary in
the conduct of its insurance operations.
Subject to the terms, conditions and limitations of this Agreement,
Provider agrees to the extent requested by Company to make available to Company
such of its facilities as Company and Provider may mutually determine to be
reasonably necessary in the conduct of its insurance operations, including but
not limited to data processing equipment, business property (whether owned or
leased) and communications equipment.
Provider agrees at all times to maintain sufficient facilities and
trained personnel of the kind necessary to perform this Agreement.
With the Company's prior written consent, Provider may arrange to
furnish such services through one or more of its affiliates, subject to the
terms, conditions and limitations set forth herein. The Provider shall furnish
the Company with written confirmation of the nature and extent of services to be
provided to the Company by such affiliates and the location(s) at which
such services shall be performed. Any such affiliate shall agree in writing to
observe and be bound by all terms and conditions of this Agreement in performing
such services and its records shall be subject to inspection, audit and
examination by the Company in accordance with Section 5 and 6 hereof. Charges
for such services shall be determined consistent with the requirements of
Section 3, and shall be included in the statement furnished by the Provider to
the Company pursuant to Section 4. Provider shall, at all times, remain liable
to the Company for the performance of services by such affiliates to the same
extent as if they had been performed by Provider itself. Exhibit A lists the
services to be provided directly by Provider and those to be delegated to
affiliates of Provider pursuant hereto as of the Effective Date of this
Agreement
2. CAPACITY OF PERSONNEL AND STATUS OF FACILITIES. Whenever Provider
utilizes its personnel to perform services for Company pursuant to this
Agreement, such personnel shall at all times remain employees of Provider
subject solely to its direction and control, and Provider shall alone retain
full liability to such employees for their welfare, salaries, fringe benefits,
legally required employer contributions and tax obligations.
No facility of Provider used in performing services for or subject
to use by Company shall be deemed to be transferred, assigned, conveyed or
leased by performance or use pursuant to this Agreement.
3. EXERCISE OF JUDGMENT IN RENDERING SERVICES. In providing any
services hereunder which require the exercise of judgment by Provider, Provider
shall perform any such service in accordance with any standards and guidelines
Company develops and communicates to Provider. In performing any services
hereunder, Provider shall at all times act in a manner reasonably calculated to
be in or not opposed to the best interests of Company.
4. CONTROL. The performance of services by Provider for Company
pursuant to this Agreement shall in no way impair the absolute control of the
business and operations of Provider or Company by their respective Boards of
Directors. Provider shall act hereunder so as to assure the separate operating
identity of Company, consistent with the provisions of Section 1507 of the New
York Insurance Law.
5. SERVICES. The performance of Provider under this Agreement with
respect to the business and operations of Company shall at all times be subject
to the direction and control of the Board of Directors of Company.
Subject to the foregoing and to the terms, conditions and
limitations of this Agreement, Provider shall provide to Company the services
set forth below in connection with the insurance business of the Company.
(a) UNDERWRITING. Subject to underwriting standards
established by Company and communicated to Provider, Provider shall provide
underwriting services, including review of policy applications, assignment of
policy numbers, MIB review, medical review and other investigations and actual
policy issue, all subject to final approval of Company. Provider shall provide
assistance to the Company in the development of all underwriting criteria
pursuant to which all new business applications and policyowner service
transactions requiring underwriting decisions will be processed and acted upon.
All new applications will initially be sent to Provider. All policyowner service
transactions requiring any underwriting decisions shall be determined by
Provider personnel. The Company shall retain the final authority to make
underwriting decisions.
(b) POLICY OWNER SERVICES. Provider shall provide automated
systems and personnel to assist with policyowner services, from the point of
issue through termination of coverage. . Policyowner records of the Company
shall be maintained at the home offices of the Company. Where such services
include assistance in the collection and processing of premiums on behalf of the
Company, the Company shall maintain a lockbox with one or more financial
institutions of its choice for the receipt of premiums All forms utilized in
connection with the Company's business and all correspondence with policyholders
shall bear its name and contain its New York address and all communications with
policy owners shall be in the Company's name.
(c) CLAIMS. Subject to claims settlement procedures
established by Company and communicated to Provider, Provider shall provide
claims services, including verification that the policy was in force, and review
and investigation of claims, all subject to final approval of Company.
(d) MARKETING. Upon request of the Company, Provider shall
assist the Company in preparation of marketing material, assist in the
recruitment and product training of agents and provide other marketing support
services. However, all decisions regarding the approval of marketing material
and the acceptance, appointment or termination of agents shall be made by the
Company.
(e) ACCOUNTING. Preparation and maintenance of financial
statements and reports, including all required GAAP and statutory financial
statements and all federal, state or local tax returns.
(f) FUNCTIONAL SUPPORT SERVICES. Provider shall provide (i)
actuarial services, including rate and profit share analysis, product
development, counseling on reserving requirements, work required for or in
support of rate and/or form submissions and actuarial certifications, (ii)
telecommunications services and electronic data processing services, facilities
and integration, including software programming and documentation, hardware
utilization related to provision of certain policy owner services and
administration, a system facilitating access to Provider's electronic data
processing system, (iii) legal services, including representation of Company in
the prosecution or defense of actions and in the negotiation and preparation of
contracts, agreements and agency documents, product development and drafting and
filing of policies and forms, governmental relations and advising on regulatory
compliance and rendering opinions on various legal matters, (iv) purchasing and
employee relations services, and (v) consultation in negotiating banking,
accounting, and treasury arrangements.
(g) AGENT LICENSING. Upon request of the Company, Provider
shall furnish the Company with administrative and clerical services in
connection with the appointment, termination and licensing of the Company's
insurance agents. However, all decisions regarding acceptance, appointment or
termination of agents shall be made by the Company.
6. CHARGES. Company agrees to reimburse Provider for services and
facilities provided by Provider to Company pursuant to this Agreement. The
charge to Company for such services and facilities shall include all direct and
directly allocable expenses, reasonably and equitably determined to be
attributable to Company by Provider, plus a reasonable charge
for direct overhead, the amount of such charge for overhead to be agreed upon by
the parties from time to time.
Subject to New York Insurance Department Regulation 33, the bases
for determining such charges to Company shall be those used by Provider for
internal cost distribution. Such bases shall be modified and adjusted by mutual
agreement where necessary or appropriate to reflect fairly and equitably the
actual incidence of cost incurred by Provider on behalf of Company.
Cost analyses will be made from time to time by Provider to
determine, as closely as possible, the actual cost of services rendered and
facilities made available to Company hereunder. Provider shall forward to
Company the information developed by these analyses, and such information shall
be used to develop bases for the distribution of expenses which more currently
reflect the actual incidence of cost incurred by Provider on behalf of Company.
Provider's determination of charges hereunder shall be presented to
Company, and if Company objects to any such determination, it shall so advise
Provider within thirty (30) days of receipt of notice of said determination.
Unless the parties can reconcile any such objection, they shall agree to the
selection of a firm of independent certified public accountants which shall
determine the charges properly allocable to Company and shall, within a
reasonable time, submit such determination, together with the basis therefor, in
writing to Provider and Company whereupon such determination shall be binding.
The expenses of such a determination by a firm of independent certified public
accountants shall be borne equally by Provider and Company.
7. PAYMENT. Provider shall submit to Company within thirty (30) days
of the end of each calendar quarter a written statement of the amount estimated
to be owed by Company for services and the use of facilities pursuant to this
Agreement in that calendar quarter, and Company shall pay to Provider within
fifteen (15) days following receipt of such written statement the amount set
forth in the statement.
Within thirty (30) days after the end of each calendar year,
Provider will submit to Company a detailed written statement of the charges due
from Company to Provider in that calendar year, including charges not included
in any previous statements, and any balance payable or to be refunded as shown
in such statement shall be paid or refunded within fifteen (15) days following
receipt of such written statement by Company.
8. ACCOUNTING RECORDS AND DOCUMENTS. Provider shall be responsible
for maintaining full and accurate accounts and records of all services rendered
and facilities used pursuant to this Agreement and such additional information
as Company may reasonably request for purposes of its internal bookkeeping and
accounting operations. Provider shall keep such accounts and records insofar as
they pertain to the computation of charges hereunder available at its principal
offices for audit, inspection and copying by Company and persons authorized by
it or any governmental agency having jurisdiction over Company during all
reasonable business hours.
With respect to accounting and statistical records prepared by
Provider by reason of its performance under this Agreement, summaries of such
records shall be delivered to Company within thirty (30) days from the end of
the quarter to which the records pertain.
9. OTHER RECORDS AND DOCUMENTS. All books, records, and files
established and maintained by Provider by reason of its performance under this
Agreement which, absent this Agreement, would have been held by Company, shall
be deemed the property of Company, and shall be subject to examination at all
times by Company and persons authorized by it or any governmental agency having
jurisdiction over Company, and shall be delivered to Company at least quarterly.
With respect to original documents other than those provided for in
Section 5 hereof which would otherwise be held by Company and which may be
obtained by Provider in performing under this Agreement, Provider shall deliver
such documents to Company within thirty (30) days of their receipt by Provider
except where continued custody of such original documents is necessary to
perform hereunder.
10. RIGHT TO CONTRACT WITH THIRD PARTIES. Nothing herein shall be
deemed to grant Provider an exclusive right to provide services to Company, and
Company retains the right to contract with any third party, affiliated or
unaffiliated, for the performance of services or for the use of facilities as
are available to or have been requested by Company pursuant to this Agreement.
11. CONTACT PERSON(S). Company and Provider each shall appoint one
or more individuals who shall serve as contact person(s) for the purpose of
carrying out this Agreement. Such contact person(s) shall be authorized to act
on behalf of their respective parties as to the matters pertaining to this
Agreement. Each party shall notify the other, in writing, as to the name,
address and telephone number of any replacement for any such designated contact
person.
12. TERMINATION AND MODIFICATION. This Agreement shall remain in
effect until terminated by either Provider or Company upon giving thirty (30)
days or more advance written notice, provided that Company shall have the right
to elect to continue to receive data processing services and/or to continue to
utilize data processing facilities and related software for up to 180 days from
the date of such notice. Subject to the terms (including any limitations and
restrictions) of any applicable software or hardware licensing agreement then in
effect between Provider and any licensor, Provider shall, upon termination of
this Agreement, grant to Company a perpetual license, without payment of any
fee, in any electronic data processing software developed or used by Provider in
connection with the services provided to Company hereunder if such software is
not commercially available and is necessary, in Company's reasonable judgment,
for Company to perform subsequent to termination the functions provided by
Provider hereunder. Upon termination, Provider shall promptly deliver to Company
all books and records that are, or are deemed by this Agreement to be, the
property of Company.
13. SETTLEMENT ON COMPLETE TERMINATION. No later than sixty (60)
days after the effective date of termination of this Agreement, Provider shall
deliver to Company a detailed written statement for all charges incurred and not
included in any previous statement to the effective date of termination. The
amount owed or to be refunded hereunder shall be due and payable within fifteen
(15) days of receipt of such statement.
14. ASSIGNMENT. This Agreement and any rights pursuant hereto shall
not be assignable by either party hereto, except as set forth herein or by
operation of law. Except as and to the extent specifically provided in this
Agreement, nothing in this Agreement, expressed
or implied, is intended to confer on any person other than the parties hereto,
or their respective legal successors, any rights, remedies, obligations or
liabilities, or to relieve any person other than the parties hereto, or their
respective legal successors, from any obligations or liabilities that would
otherwise be applicable. The representations, warranties, covenants and
agreements contained in this Agreement shall be binding upon, extend to and
inure to the benefit of the parties hereto, their, and each of their, successors
and assigns respectively.
15. GOVERNING LAW; SERVICE OF SUIT; FORUM SELECTION. This Agreement
shall be governed by and construed and enforced in accordance with the internal
laws of the State of New York applicable to contracts made and to be performed
in that State, without regard to principles of conflict of laws.
16. ARBITRATION. Any unresolved dispute or difference between the
parties arising out of or relating to this Agreement, or the breach thereof,
except as provided in Section 3, shall be settled by arbitration in accordance
with the Commercial Arbitration Rules of the American Arbitration Association
and the Expedited Procedures thereof. The award rendered by the Arbitrator shall
be final and binding upon the parties, and judgment upon the award rendered by
the Arbitrator may be entered in any Court having jurisdiction thereof. The
arbitration shall take place in New York, New York.
17. NOTICE. All notices, statements or requests provided for
hereunder shall be deemed to have been duly given when delivered by hand to an
officer of the other party, or when deposited with the U.S. Postal Service, as
first class certified or registered mail, postage prepaid, overnight courier
service, telex or telecopier, addressed
If to Provider to:
The Manufacturers Life Insurance Company (U.S.A.)
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If to Company to:
The Manufacturers Life Insurance Company of New York
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Attention: President
or to such other persons or places as each party may from time to time designate
by written notice sent as aforesaid.
18. ENTIRE AGREEMENT. This Agreement, together with such amendments
as may from time to time be executed in writing by the parties in accordance
with Section 1505 of the New York Insurance Law, constitutes the entire
agreement and understanding between the parties in respect of the transactions
contemplated hereby and supersedes the Prior Agreement, as well as any and all
other agreements, arrangements and understandings relating to the subject matter
hereof.
19. SECTION HEADINGS. Section headings contained herein are for
reference purposes only and shall not affect the meaning or interpretation of
this Agreement.
20. COUNTERPARTS. This Agreement may be executed in separate
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
21. TERMINATION OF PRIOR AGREEMENT. Company represents that the
Prior Agreement has been terminated as of the Effective Date of this Agreement.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed in duplicate by their respective officers duly authorized so to do, and
their respective corporate seals to be affixed hereto, as of the date and year
first above written.
THE MANUFACTURERS LIFE INSURANCE
COMPANY (U.S.A.)
BY
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Attest:
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THE MANUFACTURERS LIFE INSURANCE
COMPANY OF NEW YORK
BY
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