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 licensed 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;
3. 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 the 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.
"Define Service Area" means the geographic area in which Broker may solicit
enrollment of Enrolling 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.
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A. Authority of Broker. Broker represents and warrants that it has the
authority to contract on behalf of and bind the individual brokers
employed by Broker. Broker shall cause individual brokers employed by St
to comply with all the terms of this Agreement. Broker shall solicit
enrollment of Enrolling Units under this Agreement. Plans may from time
to time adjust the Minimum Enrolling Unit size 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. Broker shall have sole responsibility to compensate individual
brokers employed by It for services provided in this Agreement. In the
event of non- payment by Broker, no individual broker shall have
recourse against Plans or Insurance Company.
SECTION III. SOLTICITATION AND ENROLLMENT OF ENROLLING UNITS.
]-------------------------------------------------------------
A Solicitation or Enrolling Units. Broker shall use its best 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 time 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.
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E. Servicing of Enrolling Units. Broker shall be responsible for the
delivery and explanation of initial administrative forms, such as
billing and enrollment materials, and subsequent renewal forms, as
approved 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.
F. Compensation for Services Rendered. Broker shall be compensated for
services rendered under this Agreement pursuant to Appendix A and shall
be compensated only if the Broker continues to be recognized by the
Enrolling Unit as the Broker of Record,
G. Marketing Material. Broker shall obtain from Plans, upon request by
Broker, such marketing 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 be 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,
SECTION IV. Terms AND Conditions Governing RELATIONSHIP 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 die provision 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 or 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,
damages or judgments, 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 within Plan's control, in the discharge of his/her or their
responsibilities under this Agreement.
D. Liability Insurance. Broker shall procure and maintain, on behalf of
Broker and individual brokers employed by Broker, errors and omissions
and/or professional liability 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,
within thirty (30) days prior notice of any material changes in the
errors and omissions and/or professional liability coverage of Broker
or individual brokers employed by Broker.
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SECTION V. RESOLUTION OF DISPUTES
A. Disputes. For the purposes of this section, "Depute" means any dispute
or claim between Plans and Broker arising out of or related 1:0 the
interpretation or application of this Agreement or breach thereof,
B. Negotiation and Arbitration of Disputes. Resolution of any Dispute shall
be subject to good faith negotiation between the parties. The
complaining party shall notify the other party in writing of such
Dispute and the parties shall attempt 10 resolve the Dispute within
ninety ($0) days of die 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 arbitrator(s) shall be required to issue written
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 VI. 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 this 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 cause,
no Broker Commissions shall be payable to Broker by Plans
following the date of such termination. For me purposes of this
Agreement "with cause" shall mean default by Broker under any
material term of this 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.
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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
authority 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 (his Agreement, shall not be affected by
the termination of this Agreement and shall be determined from
the effective date of the Enrolling Unit under a Benefit
Contract.
C. Entire Agreement. This Agreement, including all appendices, constitutes
the entire agreement between the parties, superseding all prior
agreements, understanding and representations. No alteration of this
Agreement or waiver of its provision shall be 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 in
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 shall 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
accordance with the laws of the State of Utah,
IN WITNESS WHEREOF, the panics have caused this Agreement to be duly
executed as Of the date and year first written.
UNITED HEALTHCARE OF UTAH Fringe Benefit Analysts, LLC
------------------------- ----------------------------
HMO
/s/ (signature illegible) /s/ ▇▇▇▇▇ ▇▇▇▇
---------------------------------- ----------------------------
Its CFO CORPORATE BROKER
Federal Tax ID# ▇▇-▇▇▇▇▇▇▇
Date -November 3, 1998
UNITED HEALTH AND LIFE
INSURANCE COMPANY
By___________________________________
Its Director, Contracts
Date ___________
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APPENDIX A
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COMMISSION SCHEDULES TO
THE BROKERAGE AGREEMENT
SECTION I. DEFINITIONS
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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 dace.
"Contract Charges" means the total premium amount required of and collected from
an Enrolling 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 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.
A. Calculation of Commissions, Commissions payable to Broker pursuant to
Section in hereof shall be calculated as a percentage of Monthly
Contract Charges.
B. Timing of Payment of Broker Commissions. Commissions payable pursuant to
Section HI 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. Plans 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)
months 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 Enrolling
Unit's first Contract Year and for subsequent 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 in accordance with the
Plans' Broker of Record policy. In the event this Agreement is
terminated without cause, Broker Commissions shall be due and payable in
accordance with Section VI.B. of this Agreement and with the schedules
set forth below.
B. Maintenance or 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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