EX-10.39 AIG RISK MANAGEMENT, INC. BOUND PROPOSAL



 








Exhibit 10.39



CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY ASTERISKS AND
BRACKETS, HAS BEEN OMITTED FROM EXHIBIT 10.39 TO GEVITY HR, INC.’S ANNUAL REPORT ON FORM 10-K
FOR THE YEAR ENDED DECEMBER 31, 2005, AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.




AIG Risk Management, Inc



A Member Company of American International Group, Inc




Gevity HR, Inc.




1/1/06-07 




Workers Compensation/Employers Liability 




Final Bound Binder








 









 










80 PINE STREET, THIRD FLOOR

NEW YORK, NEW YORK 10005

(212) 770-3708/ Fax (212) 480-2239



The following item is a Binder prepared by AIG Risk Management, which describes the
coverages, terms and conditions that AIG Risk Management and Gevity HR intend to implement in
the context of Gevity HR’s Workers Compensation Risk Management Program effective 1/1/2006.
This Binder incorporates a Deductible Buy-Back Policy issued by a member company of AIG
covering a portion of Gevity’s expected deductible losses.



The Binder contemplates the following terms:





	 	1.	 	Based on unmodified manual premium of $150,032,865 with corresponding
estimated modified premium of $176,594,314. Rates outlined within this binder
will be applied to unmodified manual premium.






	 	•	 	With respects rate changes & potential impact to Gevity: Rate changes
made during the course of an in force policy would not apply until the renewal
of the subsequent policy term unless there is an anniversary rating date.






	 	2.	 	Receipt of first installment due prior to inception.
	 
	 	3.	 	Annual manual premium growth of no more than [*]% in the states of CA, GA, TX, or FL ([*]%
As respects FL) individually and no more than [*]% in the aggregate. If calculated at
monthly audit 20% or greater premiums are found for states other than FL (FL is
[*]%), we would retain the right to immediately increase and bill excess premium and
collateral by 1.25 times the relative exposure in the applicable states above the
trigger.
	 
	 	4.	 	If actual surcharges including NY second injury exceed the deposit indicated below, Gevity
will be responsible for the additional cost.
	 
	 	5.	 	Continued compliance with monthly voluntary audits.
	 
	 	6.	 	This Binder contemplates that there are no material changes between the date of this
Binder
and expiration. If a material change should occur, we reserve the right to
re-price account immediately and change our collateral requirements.
Material change is defined as inclusive but not limited to: changes in
management team, changes in manual rate profile of Gevity, deterioration in
either Gevity’s financials or projected losses under the current program,
acquisitions or transfer in whole or in part of another similar organization or
book of business, any breach of our current contract.
	 
	 	7.	 	This Binder is net of brokerage commission.
	 
	 	8.	 	Issuance of Deductible Buy-Back Policy, by a member Company of AIG,
covering
deductible losses up to an aggregate of $16,200,000. In addition to providing
coverage up
to the $16,200,000 aggregate, the deductible Buy-Back policy will provide
$20,000,000
of aggregate stop coverage above a $180,000,000 attachment point. The
$180,000,000 attachment point is a minimum and adjustable upwards only based
on audited unmodified premium.
	 
	 	 	 	We retain the right to re-price if any of the following occur:






	 	-	 	Florida Unmodified Premium grows by more than [*]%. The
projected 2006 Florida unmodified premium = $[*]. Countrywide projected
2006 unmodified premium = $[*].
	 
	 	-	 	Florida Unmodified Premium grows more than [*]% of the
countrywide Unmodified Premium (Projected at [*]%)
	 
	 	-	 	The 2006 Interstate Modification Increases to greater than
[*].







 




			
	*	 	THIS CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION.




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Estimated Exposures




$4,770,229,137 estimated payroll excluding monopolistic states




Retained Amount




	 	 	 	 	 	 	 	 	 
	 

	 	Workers’ Compensation and Employers’
	 	 	*$2,000,000	 	 	Each accident or each
	 

	 	Liability under state Law
	 	 	 	 	 	person for Disease
	 
	 	 	 	 	 	 	 	 
	 

	 	Workers’ Compensation and Employers’
	 	$	2,000,000	 	 	Each Accident or each
	 

	 	Liability under Federal Law
	 	 	 	 	 	person for Disease








 




			
	*	 	Minnesota $1,520,000




Treatment of Allocated – “Pro- Rata” in accordance with the following definition:



“Allocated Loss Adjustment Expenses” or “ALAE” means all court costs and court expenses; pre- and
post-judgement interest; fees for service of process; attorneys’ fees; cost of undercover operative
and detective services, costs of employing experts; costs for legal transcripts; costs for copies
of any public records; costs of depositions and court-reported or recorded statements; costs and
expenses of subrogation; and any similar fee, cost or expense reasonably chargeable to the
investigation, negotiation, settlement or defense of a loss or a claim or suit against you, or to
the protection and perfection of your or our subrogation rights.




  “ALAE” shall not include:




	 	1.	 	Fees payable to the Claims Service Provider as set forth in its fee schedules
payable by us, nor;
	 
	 	2.	 	the salary, employee benefits, or overhead of any of our employees, nor
	 
	 	3.	 	the fees of any attorney who is our employee or under our permanent retainer;
nor
	 
	 	4.	 	the fees of any attorney we retain to provide counsel to us about our
obligations, if any, under any policy issued by us or our affiliated company(ies), with
respect to a claim or suit against you.





     “Allocated Loss Adjustment Expenses” Included as Reimbursable Amount or Subject Loss



     All or a part of ALAE calculated according to the following formula:




	 	a)	 	If we have NO obligation under the Policies to pay damages,
benefits or indemnity, all ALAE up to the applicable Deductible
or Loss Limit and 100% of all ALAE in excess thereof; or
	 
	 	b)	 	If our obligation to pay damages, benefits or indemnity under
the Policies exceeds zero ($0), all ALAE times the amount of our
obligation to pay damages, benefits or indemnity up to the
applicable Deductible or Loss Limit, divided by the total amount
of our obligation to pay damages, benefits or indemnity.





Program Components




	 	 	 
	Total Pay–In
	 	$115,363,394
	Pay-In Loss Provision
	 	$90,000,000 (Includes $16,200,000 loss
	 
	 	Provision for deductible Buy-Back policy)
	Pay-In Insurance Company Expenses(1)
	$25,363,394






	 	 	 	 	 
	 
	 	• Profit and Administration	 	$[*]
	 
	 
	 	•  Excess Premium	 	$[*] (Includes [*] in Terrorism Premium)
	 
	 
	 	•  Insurance Charge	 	$[*]
	 
	 
	 	•  Claims Administration	 	$[*]
	 
	 
	 	•  Florida Tax/RMLs/ Board & Bureaus	 	$[*]
	 
	 
	 	•  A/O States Tax/RMLs/ Board & Bureaus	 	$[*]
	 
	 
	 	•  Deductible Buy-Back Taxes	 	$[*]
	 
	 
	 	•  NY State Assessment Charge	 	$[*]








 




			
	*	 	THIS CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.




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	     Estimated Workers Compensation Surcharges
	 	$672,888 (In addition to Total Pay-In above)
	Adjustable based upon audited premium
	 	 
	 
	 	 
	Annual Unmodified Manual Premium
	 	$150,032,865
	Estimated Monthly Unmodified Manual Premium
	 	$12,502,780 (1st )
	 
	 	$12,502,735 (each of the next 11 months)







	(1)	 	Does not include potential premium taxes on deductible reimbursements except for those
states identified in the schedule to the Payment Agreement. If a determination is made by any
state regulatory authority that deductible reimbursements are taxable as premium or subject to
assessments, you will be charged for said taxes and assessments
	 
	(2)	 	Claims Administration Expense Payin = $[*]. Predicated on assumption of [*]% LCF off
Incurred Losses limited to $1,000,000 per occurrence ([*]). To be adjusted annually based on
calculation of ultimate loss using LDFs identified within the binder times applicable LCF.
	 
	 	 	Our Binder contemplates Gevity successful elimination of F.E.T. – Should F.E.T. be
assessed this charge will be passed along to Gevity.
	 
	(3)	 	The Tax Amount show above reflects our estimate of taxes, Risk Market Loads (RML’s) and
Board & Bureau
Charges in effect currently for all states.





Monthly/Quarterly Premium Adjustment




     We will require Monthly voluntary payroll audits, supplemented with quarterly physical
audits:




	 	•	 	On a Monthly basis we will calculate the premium based upon the voluntary
payrolls submitted and compare to the estimated premium. Any additional or return premium
will be due on a quarterly basis. If the resulting additional premium is 10 % or
greater ,including on a cumulative monthly basis, the associated additional allocation for
loss provision will be subject to an additional buffer of [*]%. The [*]% collateral buffer
will apply to the loss provision of all additional premium once the growth of that
additional premium reaches 10% or more. Such additional premium and collateral will be
collected on a quarterly basis.
	 
	 	•	 	On a Quarterly basis a physical audit will be performed and compared to the
estimated premium. If there is a difference of 15+% or greater than projection then future
monthly physical audits will be required.
	 
	 	•	 	Premium to be paid-in in accordance with installment schedule shown
below. The original calculation of the premium is subject to the following:






	 	•	 	Unmodified Standard Premium is within 20% of the original
estimated amount. If the variance is greater an entirely new analysis
will be performed.
	 
	 	•	 	P&A and Excess Premium are subject to a 90% minimum based on
the original calculation of program costs or $[*]. No further reduction
in these costs will be made.






	 	•	 	(New Monthly Unmodified Manual Premium less Est. Monthly Premium) x.7689 =
A/P or R/P is subject to the following:






	 	•	 	The change in pay-in premium from the resulting unmodified manual premium
will be allocated 59.99% to loss provision and 16.90% to insurance company
expenses.
	 
	 	•	 	The monthly adjustment is subject to a minimum loss provision of $6,375,000
( 85% of Anticipated Loss Provision) and minimum expenses as detailed
below. If cancelled prior to end of a full annual term either by GEVITY or AIG
– an interim adjustment will be conducted based on unmodified manual premium on
YTD basis (subject to expense minimum as outlined below).







 




			
	*	 	THIS CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.




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	 	•	 	The additional/return unmodified premium will be calculated in accordance
with the monthly underwriting information provided by GEVITY. The
additional/return premium will be applied to the following monthly installment.
	 
	 	•	 	If the total amount of claims we shall have paid on your behalf exceeds the
loss provision funding collected for (3) consecutive billing periods within the
first twelve months, we may require you to pay us additional funds.





Insurance Company Expense Annual Adjustment



At premium audit, approximately 18 months from inception of the program, the following
expenses will be adjusted. Premiums shown below represent pay-in premiums as outlined on
page 3.





	 	•	 	Florida Taxes – $[*]. ($[*] adjustable at [*]% of FL Audited
Undiscounted Standard Premium prior to Deductible Discount ( est. $[*]) plus $[*]
adjustable at [*]% of FL Audited Deductible Premium
(est. $[]).
	 
	 	•	 	A/O State Taxes — $[*]. Adjustable off the Unmodified Manual Premium, excluding FL, at a rate of
[*]%. (est. $[*])
	 
	 	•	 	NY State Assessment Charge of $[*] will be subject to audit based on the final Standard WC Premium.
	 
	 	•	 	Claims Administration — $[*] pay-in






	 	•	 	LCF option selected multiplied by Ultimate Loss as calculated
annually using the LDFs contained within the Binder.






	 	•	 	Excess Premiums and Profit and Administration = $[*]






	 	 	 	Audited Unmodified Manual Premium times [*]%; subject to [*]% minimum.






	 	•	 	Surcharges and Assessments = $672,888




THE ABOVE PREMIUMS INCLUDE THE FLORIDA LOSS REIMBURSEMENT PREMIUM. THE FINAL FLORIDA PREMIUM
WILL BE CALCULATED BASED UPON THE FILED FLORIDA LOSS REIMBURSEMENT FILING.



Formula = Modified Standard Premium, less Loss Reimbursement Premium, less Premium Discount,
plus Tax Provision, plus Expense Constant, plus Terrorism Risk Insurance Act Premium) (as per
policy detail).



Estimate at Inception:



Modified Standard Premium — $[*]



Loss
Reimbursement Premium — ($[*])



Premium
Discount — ($[*])



Tax Provision — $[*]



Expense Constant — $[*]



Terrorism Risk Insurance Act Premium — $[*]



Total Estimated Premium — $[*]




     Surcharges and Assessments




The special surcharges and assessments will be adjusted based on the rates in effect
during the policy period.




Any references made in this binder to taxes or tax rates or assessments are subject to
change if such taxes or tax rates or assessments are changed or modified by the
respective taxing authority (ies) prior to inception or following inception. You shall be
obligated for any resulting increase that occurs.





 




			
	*	 	THIS CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.




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Other Annual Adjustment:





At premium audit, approximately 18 months from inception of the program, the following
item will also be adjusted:




- Aggregate Stop Attachment Point: $180,000,000 minimum and adjusted at a
rate of 1.200 per $1 of audited unmodified premium.




- Insurance Charge: $[*] Flat



Loss Provision Annual Adjustment



The losses will be adjusted based on losses valued at eighteen months after inception and annually
thereafter. There is no Minimum or Maximum Loss Provision.





The Additional/Return Loss Provision will be:




The difference between (Ultimate Losses) and (Loss Provision amount collected
during the policy period)




The formula for the ultimate losses is as follows:




Ultimate Losses = Incurred Losses capped at the retention for the period of
1/1/06-1/1/07, valued as of 7/1/07 x loss development factor. The loss development
factors are as follows:


@ 18 months [*]

@ 30 months [*]

@ 42 months [*]

@ 54 months [*]

@ 66 months [*]

@ 78 months [*]



Determination of loss provision adjustment after 78 months will be addressed in the Payment
Agreement.



Installments



The premium and surcharges are due and payable according to the following schedule :



Due 1/1/06: $10,286,506 and 11 equal installments of $9,613,616 due 2/1/06 through 12/1/06.



If the first installment is not received prior to the inception date coverage will not
incept.


If the remaining payments are not received prior to the due date the policies will be
cancelled for nonpayment of premium.



Surcharges of $672,888 is included in the first installment.



Collateral Requirement



The current collateral requirement for 1/1/06-07 will be $90,000,000. This is our original
assessment of loss pick . The collateral requirement for 1/1/06-07 will be provided as
follows:





	Ø	 	$16,200,000 through a Deductible Liability Protection Policy
(“Deductible Buyback”) issued by a member company of American
International Group, Inc.
	 
	Ø	 	$73,800,000 through Hybrid RCAMP.







 




			
	*	 	THIS CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.




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G.L. and A.L. pricing and collateral requirements are outlined on a separate binder. However
Gevity’s obligations under W.C. , G.L. and A.L. continue to be cross-collateralized.



The collateral will be reviewed on a annual basis.



Security will be on a depleting basis. Using the Deductible Buyback and the Hybrid RCAMP as
collateral, retained losses will first be paid out of the Deductible Buyback until $16,200,000 is
exhausted then Hybrid RCAMP will be responsible for the next $73,800,000. No monthly loss billings
will go to the insured.



The captive collateral pay-in during the 1/1/06 – 1/1/07 period will be adjusted on a quarterly
basis during the policy period based on the following formula:




Annual unmodified manual premium x.5999 = Total Captive Collateral Requirement




Please note the Total Captive Collateral requirement is subject to a minimum of $76,500,000
[approximately 85% of collateral amount above] until the first loss provision annual adjustment at
18 months after inception for 2006-07 program year. The minimum is not the minimum collateral
amount AIG must hold at any given time over the first eighteen months, but instead the amount that
must be paid in over the first year. In other words, if the unmodified manual premium after the
twelfth monthly adjustment is so low that it triggers the minimum of $76,500,000, AIG will compare
the minimum to what was submitted in collateral over the year, in lieu of to what was on hand after
depletion for paid losses.




If the program does not renew, then the collateral will be adjusted annually in accordance with the
terms outlined in the Payment Agreement and there will be no return of collateral until 30 months
from inception.




The Hybrid RCAMP portion of this deal will be structured as follows:




We will issue You Deductible Policies. Your captive, in turn, will issue You a Deductible
Reimbursement Policy providing coverage for the same liabilities referenced in the policies we
issue to you for the first $2,000,000 per occurrence.




Under the Hybrid RCAMP collateral option, You assign your rights under the captive issued
Deductible Reimbursement to Us. Furthermore, We will reinsure Your captive for liabilities it
assumes under the Deductible Reimbursement Policy.




This deal will be documented via an Assignment Agreement, Reinsurance Quota Share Agreement and the
Payment Agreement/Schedule of Policies & Payments. The Assignment Agreement and the cash premium
received via this reinsurance transaction will service to collateralize Your Deductible Obligations
to Us.




The Captive has two Investment Selection options at its disposal which are referenced below:




Investment Selection Options





	1.	 	One-Year rate




Under this option, We would guarantee a fixed rate of return on the Reinsurance Premium set at an
enhanced spread of [*] basis points over the 6-month U.S. Constant Maturity Treasury yield as it
reads the day we are in receipt of the first installment of the Reinsurance Premium. The interest
rate will reset annually based on then current market conditions. Should the Captive cancel the
Reinsurance Quota Share Agreement at any time prior to January 1, 2007, it is understood and agreed
that interest will be deemed to have accrued from the date the premium is delivered to us, to the
date of cancellation, at the 1-month U.S. Constant Maturity Treasury yield as it read the day we
were in receipt of the first installment of Reinsurance Premium.






 




			
	*	 	THIS CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.




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	2.	 	Interest rate payable until all claims are closed




Under this option, We would guarantee a fixed rate of return on the Reinsurance Premium set an
enhanced spread of [*] basis points over the 3-year U.S. Constant Maturity Treasury yield as it
reads the day we are in receipt of the first installment of the Reinsurance Premium. Said rate
would be in effect until all claims were closed. Should the Captive cancel the Reinsurance Quota
Share Agreement at any time, it is understood and agreed that interest will be deemed to have
accrued from the date the premium is delivered to us, to the date of cancellation, at the
applicable interest rate as per the following Interest Rate Penalty Schedule.



The aforementioned [*] basis point spread over the 3-year U.S. Constant Maturity Treasury yield may
increase to a maximum spread of [*] basis points over the 3-year U.S. Constant Maturity Treasury
yield. We will make the final determination of the guaranteed spread at such time as the first
installment of the Reinsurance Premium is received.



Interest Rate Penalty Schedule




	 	 	 
	Cancellation Date	 	Interest Rate *
	Prior to January 1, 2007

	 	1-Month CMT
	January 1, 2007 — January 1, 2008

	 	6-Month CMT
	January 1, 2008 — January 1, 2009

	 	1-Year CMT
	January 1, 2009 — January 1, 2010

	 	(1-Year CMT + 2-Year CMT) / 2
	January 1, 2010 — January 1, 2011

	 	2- Year CMT
	January 1, 2011 — January 1, 2012

	 	2- Year CMT
	January 1, 2012 — January 1, 2013

	 	(2-Year CMT + 3-Year CMT) / 2
	January 1, 2013 — January 1, 2014

	 	(2-Year CMT + 3-Year CMT) / 2
	January 1, 2014 — January 1, 2015

	 	3- Year CMT
	January 1, 2015 — January 1, 2016

	 	3- Year CMT
	January 1, 2016 until All Claims Closed

	 	3- Year CMT + 30 basis points.








 




			
	*	 	as each read, the day the first installment of the Reinsurance Premium is received




For either Investment Selection Option referenced above, we will credit you additional
interest accrued monthly on the $73,800,000 in Reinsurance Premium on the daily cash balances of
the $16,200,000 referenced above, calculated at a rate dependent upon which option you select.



Under either Investment Selection Option, the Captive will receive a monthly accrued interest
statement, detailing the opening fund balance, less losses paid in each particular month, along
with interest earned on the average investable balance. This Binder contemplates that we will
not collect Escrow. Therefore, the monthly accrued interest statement will evidence losses being
paid at the mid-point of each month.



Should the Federal Reserve lower the targeted Federal Funds rate at any time prior to the receipt
of the first installment of the reinsurance premium, both investment selection options will become
null and void.






 




			
	*	 	THIS CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.




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Underwriting Guidelines



At a minimum we will not provide coverage for the following



[*]



The following clients must be referred to AIG for approval



[*]



Referral Items





	 	•	 	Policy Issuance and Weekly reporting Information
	 
	 	•	 	4 years including current policy period currently valued hard copy loss information
	 
	 	•	 	Historical Payroll Information
	 
	 	•	 	Application




Policy Issuance and Weekly Reporting Information Guidelines




Client name




Mailing address




Schedule of working locations




Governing class or SIC code




Description of Operations




Payroll by classification Code by State




Current Experience modification




Bureau file number




Anniversary rating date




Federal Unemployment ID number




Head count by location / total leased, total by employer




Effective date of added/terminated client




Indiana Unemployment Id # (7 digit, numeric)




Minnesota Unemployment Id# (7 digit, numeric)




New Jersey Unemployment Id# (7 digit, numeric)




New York Unemployment Id# (7 digit, numeric)




Vermont Unemployment Id# (7 digit, numeric)




New Mexico Unemployment Id# (7 digit, numeric)




New Hampshire and New Mexico phone numbers per locations




New Hampshire and New Mexico Contact Name per Location




New York Contact Name per Location




Alaska Contact Named per Location




Department of Labor # for the state of Hawaii



Special Conditions



You must execute and return an original executed copy of both the Payment Agreement and the
Schedule, and any other documents we deem necessary to adequately document the terms of the
program, to us at our address shown above within 30 days after the Effective Date above.



If not so returned and delivered, we may void the Finance Plan summarized herein and set forth in
detail in the Payment Agreement. Upon our notice of our voiding of the Finance Plan to you at your
address shown above, the entire amount of the “Estimated Total Cost” specified under FINANCE PLAN
herein will become immediately due and payable to us in cash at our address shown above. Failure
to pay such amount within 10 days thereafter shall entitle us to cancel the insurance and any
reinsurance and to terminate all services under this Program by notice to you when not less than 10
days thereafter the cancellation and termination shall become effective.




 




			
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Claims Administration



Claims will be handled by AIG Claims Services, Inc. The claims administration pricing is included
in the insurance company expenses. Rehabilitation and managed care services are billed separately
at prevailing rates. Claim Investigations conducted by the Investigative Services Division to
assist the claims adjusters are an allocated expense and charged to the file at Prevailing Time &
Expense. Fraud investigations conducted for the purpose of criminal prosecution are not billed to
the file and considered part of the overall claim fee.



The claims administration charges include four intellirisk setups and 12 monthly tape to tape
triangles to Marsh STARS system. If the program does not renew, AIG agrees to continue to provide
access to Intellirisk setups and monthly tapes as long as Gevity requires, at prevailing rates.
Also if the program does not renew, AIG will continue to grant access to data and tape to tape
triangles to Marsh at prevailing rates.



Allocated loss adjustment expenses, as defined above, are not included in the Insurance Company
expenses.



Loss Control Services



We understand that Gevity HR’s loss control professionals are providing ongoing loss control
services to your clients and that additional loss control services have not been requested as part
of the AIG program. Only those loss control surveys needed for underwriting purposes and those
services mandated by state regulatory requirements will be included in the AIG program. Of course,
additional loss control services can be provided on an unbundled basis at any point during the
policy year.



AIG Consultants will provide a Technical Services Manager – [*] — to manage the delivery of all
services. We maintain a nationwide network of loss control consultants to provide service at your
key clients’ facilities, which can serve as a cost effective complement to the work done by
Gevity’s field risk consultants. AIG Consultants, Inc. can provide personnel with experience and
expertise commensurate with the services needed. Ergonomic and/or industrial hygiene specialists
can be provided as appropriate. Consultant training and/or specialty training in industrial
hygiene/ergonomics can be provided to your field risk consultants. To ensure readily available
competent consultants near our clients various locations, we maintain a complement of approved
subcontractor consultants to supplement our internal loss control professionals. These
subcontractors are subject to our Quality Management System approval process as a requirement of
AIG Consultant’s Inc. ISO 9000 certification.



Coverages



A specimen policy will be prepared for the MCP states with all appropriate forms attached and this
will serve as the master sample for each of those states where multiple policies are required.
All endorsements may not be approved for use in all states and we can only include those
endorsements where they are approved.



Named insured will include all Gevity HR, Inc. affiliated or subsidiary entities for which payroll
is reported to AIG Risk Management shown as follows:



Gevity HR, Inc. and it’s wholly-owned subsidiaries:



Gevity HR, L.P.



Gevity
HR II, L.P.



Gevity
HR, III, L.P.



Gevity HR IV, L.P.



Gevity HR V, L.P.



Gevity HR VI, L.P.






 




			
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Gevity HR VII, L.P.



Gevity HR VIII, L.P.



Gevity HR IX, L.P.



Gevity HR X, L.P.



Gevity HR XI, LLC



Gevity HR XII Corp.



Gevity HR XIV, LLC



Gevity Insurance Agency, Inc.



Staff Leasing, LLC



Concorda Insurance Company Limited




	 	 	 	 	 
	A.

	 	Workers’ Compensation
	 	Statutory
	 
	 	 	 	 
	B.

	 	Employers Liability Limits:
	 	$2,000,000 per Occurrence/Accident
	 

	 	 	 	$2,000,000 Policy Limit Disease
	 

	 	 	 	$2,000,000 each Employee Disease
	 
	 	 	 	 
	C.

	 	Stop Gap Employers Liability applies	 	 
	 

	 	in Monopolistic States, Canada &	 	 
	 

	 	Puerto Rico
	 	$2,000,000 per Occurrence/Accident
	 

	 	 	 	$2,000,000 Policy Limit Disease
	 

	 	 	 	$2,000,000 each Employee Disease
	 
	 	 	 	 
	D.

	 	Other States Coverage All States,	 	 
	 

	 	excluding Ohio, West Virginia, North	 	 
	 

	 	Dakota, and Washington (for
WC 000000A form delete Part three, A.4).	 	 
	 
	 	 	 	 
	E.

	 	USL&H	 	$2,000,000 per Occurrence/Accident





Extensions of Coverage — in addition to all State required endorsements





	 	1)	 	-Voluntary Compensation: Applies All States except Monopolistic States
	 
	 	 	 	Designated Law: State of Hire






	 	-	 	Foreign Voluntary Compensation: (This coverage applies to U.S. citizens and
non-US citizen and residents of the U.S. injured outside the U.S.)





	 	 	 	 
	 	Limit:
	 	(Annual Reinstatement)
	 	Any One Employee:
	 	$2,000,000
	 	Policy Limit:
	 	$2,000,000
	 	Designated Law:
	 	State of Hire
	 	Covers B.I. from Endemic Disease
	 	 
	 	Includes Repatriation Expenses
	 	$25,000 each employee







	2)	 	Alternate Employer Endorsement – blanket basis using the following wording: All employee
leasing clients of Gevity HR and as respects the “State” – any state listed in item 3.A. of
the information Page” and “Contract” – All agreements between Gevity HR and their employee
leasing clients.
	 
	3)	 	Waiver of Subrogation -against third parties where clients required it (on approval basis).
It is understood and agreed that notwithstanding anything to the contrary contained in the
policy, the company waives the right of subrogation as respects the insured’s right of
recovery against any person to which the insured has agreed to waive subrogation.
	 
	4)	 	United States Longshoremen and Harbor Workers Act -(WC 00 01 06 A)-re: work in all
jurisdictions subject to the act including monopolistic states
	 
	5)	 	Notice of Occurrence




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	6)	 	Knowledge of Occurrence
	 
	7)	 	Maritime Coverage (Jones Act) is included in Employers Liability Limits
	 
	8)	 	Voluntary Compensation Maritime Coverage
	 
	9)	 	Outer Continental Shelf Lands Act Coverage
	 
	10)	 	Sole Proprietors, Partners, Officers and Other Coverages
	 
	11)	 	Cancellation and Non-renewal Notice – cancellation for non-payment 10 days and for
cancellation other than non-payment and non-renewal 120 days.
	 
	12)	 	Federal Employers Liability Act Coverage — $2,000,000 each occurrence/$2,000,000 aggregate
	 
	13)	 	Unintentional Non-Disclosure of Hazards
	 
	14)	 	Florida Employment and Wage information and Release Endorsement
	 
	15)	 	Designated Workplace Endorsements where required
	 
	16)	 	New York, Missouri and Massachusetts limit of Liability endorsements
	 
	17)	 	Ohio Employers Liability Coverage Endorsement
	 
	18)	 	All State required Employers Liability Coverage endorsements
	 
	19)	 	Amendatory Endorsement — Insurance applies to B.I. to “corporate employees” of the named
insured (not ‘clients employees’, i.e. work site employees leased to clients) participating in
any recreation activities sponsored by or with the permission of the Named Insured.
	 
	20)	 	Texas employee provider/client company endorsement (if needed)
	 
	21)	 	Texas exempt employees coverage endorsement
	 
	22)	 	Texas employee leasing client endorsement
	 
	23)	 	New Hampshire Sole Representative endorsement
	 
	24)	 	Rhode Island Direct Liability Statute & Safety Inspection endorsements.
	 
	25)	 	S. Dakota Direct Action Statute endorsement.
	 
	26)	 	New Mexico Safety Device Coverage endorsement.
	 
	27)	 	Massachusetts, Missouri and Oklahoma Construction Classified Adjustment endorsements.
	 
	28)	 	Oklahoma Fraud Warning endorsement.
	 
	29)	 	State Safety Workplace endorsements.
	 
	30)	 	S. Dakota Managed Care endorsement.
	 
	31)	 	Wisconsin – Guaranteed Cost policy subject to $2,000,000 retention.
	 
	32)	 	Maine inspection Immunity Endorsement
	 
	33)	 	Missouri Property and Casualty Guaranty Association Endorsement
	 
	34)	 	Terrorism Risk Insurance Act Endorsement (pending US government decision)
	 
	35)	 	Employee Leasing Client Endorsement (where approved)
	 
	36)	 	Labor Contractor Endorsement (where approved)
	 
	37)	 	Migrant and Seasonal Agricultural Workers Protection Act Coverage Endorsement –WC 00 01 11
(where approved)




All State required / mandatory endorsements



Note Defense Base Act Coverage will be provided by AIG WorldSource on a separate policy at no
additional charge if the exposure is incidental or “if any” basis. However if it is determined that
there is significant exposure to Defense Base Act Coverage, we will advise you of the additional
charge.



This Binder contains a broad outline of coverage and does not include all the terms, conditions and
exclusions of the policy (or policies) that may be issued to you. The policy (or policies) contain
the full and complete agreement with regard to coverage. Please review the policy (or policies)
thoroughly upon receipt and notify us promptly in writing if you have any questions. In the event
of any inconsistency between the final bound binder and the policy, the policy language shall
control unless the parties agree to an amendment.




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This Binder is intended to be a statement of the mutual interest of the parties with respect to the
Workers Compensation Risk Management program described above and is subject to execution and
delivery of a mutually satisfactory Payment Agreement, RCAMP Agreement, and Collateral Trust
Agreement. The parties will become legally obligated with respect to the Workers Compensation Risk
Management program described above only in accordance with the terms contained in the Payment
Agreement, RCAMP Agreement and Collateral Trust Agreement relating thereto if, as and when such
document has been executed and delivered by the parties.




SIGNATURES




	 	 	 	 	 	 	 	 	 
	Acknowledged on behalf of AIG Risk Management, Inc.	 	 	 	Acknowledged on behalf of Gevity HR, Inc.
	 
	 	 	 	 	 	 	 	 
	Signed by

	 	 	 	 	 	Signed by	 	 
	 

	 	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Thomas Agnello	 	 	 	Arthur Singleton
	Regional Manager, National Accounts	 	 	 	Vice President, Finance
	 
	 	 	 	 	 	 	 	 
	Dated

	 	 	 	 	 	Dated:	 	 
	 

	 	 
	 	 	 	 	 	 






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