Exhibit 10.26


 


CONFIDENTIAL
TREATMENT REQUESTED: INFORMATION FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN
REQUESTED IS OMITTED AND NOTED WTH “**”. 
AN UNREDACTED VERSION OF THIS DOCUMENT HAS ALSO BEEN PROVIDED TO THE
SECURITIES AND EXCHANGE COMMISSION.


 


 


Dated 28 April 2004


 


 


GEFA International
Holdings, Inc.


 


and


 


GE Capital Corporation


 


 


Framework Agreement


 


 


Linklaters


 


One Silk Street 


London EC2Y 8HQ


 


 


Telephone (44-20) 7456 2000


 

















 


TABLE OF
CONTENTS


 


	
  1

  	
  Definitions And Interpretation

  	
   

  
	
   

  	
   

  	
   

  
	
  2

  	
  Local Agreements

  	
   

  
	
   

  	
   

  	
   

  
	
  3

  	
  Exclusive Appointment

  	
   

  
	
   

  	
   

  	
   

  
	
  4

  	
  Regulatory Requirements

  	
   

  
	
   

  	
   

  	
   

  
	
  5

  	
  Financial Terms

  	
   

  
	
   

  	
   

  	
   

  
	
  6

  	
  Pricing - Profit Share and Financial
  Performance

  	
   

  
	
   

  	
   

  	
   

  
	
  7

  	
  Marketing

  	
   

  
	
   

  	
   

  	
   

  
	
  8

  	
  Non Solicit

  	
   

  
	
   

  	
   

  	
   

  
	
  9

  	
  Service Levels, Service Credits, Product Development and Good
  Industry Practice

  	
   

  
	
   

  	
   

  	
   

  
	
  10

  	
  Intellectual Property, Data and Data
  Protection

  	
   

  
	
   

  	
   

  	
   

  
	
  11

  	
  Data Protection

  	
   

  
	
   

  	
   

  	
   

  
	
  12

  	
  Gross Written Premiums and Collection

  	
   

  
	
   

  	
   

  	
   

  
	
  13

  	
  Cancellations and Cancellation Fees

  	
   

  
	
   

  	
   

  	
   

  
	
  14

  	
  Default Interest

  	
   

  
	
   

  	
   

  	
   

  
	
  15

  	
  Relationship Managers, and Informal Dispute
  Resolution and Arbitration

  	
   

  
	
   

  	
   

  	
   

  
	
  16

  	
  Performance Meetings And Report Outs

  	
   

  
	
   

  	
   

  	
   

  
	
  17

  	
  Accounts,
  Records and Access to Information

  	
   

  
	
   

  	
   

  	
   

  
	
  18

  	
  Assignment, Agents and Sub-Contracting

  	
   

  
	
   

  	
   

  	
   

  
	
  19

  	
  Warranty of Authority

  	
   

  
	
   

  	
   

  	
   

  
	
  20

  	
  Commencement, Term and Termination

  	
   

  
	
   

  	
   

  	
   

  
	
  21

  	
  Consequences of Termination

  	
   

  
	
   

  	
   

  	
   

  
	
  22

  	
  Force Majeure

  	
   

  
	
   

  	
   

  	
   

  
	
  23

  	
  Confidential Information

  	
   

  
	
   

  	
   

  	
   

  
	
  24

  	
  Waiver

  	
   

  
	
   

  	
   

  	
   

  
	
  25

  	
  Entire Agreement

  	
   

  
	
   

  	
   

  	
   

  
	
  26

  	
  Costs and Expenses

  	
   

  
	
   

  	
   

  	
   

  
	
  27

  	
  No Partnership

  	
   

  
	
   

  	
   

  	
   

  
	
  28

  	
  Notices

  	
   

  
	
   

  	
   

  	
   

  
	
  29

  	
  Invalidity and Severability

  	
   

  



 


i

















 


	
  30

  	
  Governing Law and Jurisdiction and Appointment of Process Agent

  	
   

  
	
   

  	
   

  	
   

  
	
  31

  	
  Exclusion of Third Party Rights

  	
   

  
	
   

  	
   

  
	
  Schedule 1 Existing Business

  	
   

  
	
   

  	
   

  
	
  Schedule 2 GE Financial Insurance
  Service Level Standards

  	
   

  
	
   

  	
   

  
	
  Schedule 3 New Local Agreement Profit
  Share Provisions

  	
   

  
	
   

  	
   

  
	
  Schedule 4 Product Performance Monitoring

  	
   

  
	
   

  	
   

  
	
  Schedule 5 Potential New Business and
  Payment Protection Products Set-up Process

  	
   

  
	
   

  	
   

  
	
  Schedule 6 Part A: Framework Agreement
  Performance Meetings

  	
   

  
	
   

  	
   

  
	
  Schedule 7 Supplemental Sales
  Commission

  	
   

  
	
   

  	
   

  
	
  Schedule 8 Local Agreements

  	
   

  
	
   

  	
   

  
	
  Schedule 9 GEFA Group Companies

  	
   

  
	
   

  	
   

  
	
  Schedule 10 EXCHANGE RATES

  	
   

  
	
   

  	
   

  
	
  Schedule 11 Form of Local Addendum

  	
   

  
	
   

  	
   

  
	
  Schedule 12 Form of New Local
  Agreement

  	
   

  
	
   

  	
   

  
	
  Schedule 13 APPROVED SUBCONTRACTORS

  	
   

  
	
   

  	
   

  
	
  Schedule 14 Benchmarking

  	
   

  
	
   

  	
   

  
	
  Schedule 15 Potential Substitute
  Business

  	
   

  
	
   

  	
   

  
	
  Schedule 16 Business Proposal Pricing
  Process

  	
   

  



 


ii

















 


Facsimile (44-20) 7456 2222


 


Ref


 


2

















 


THIS AGREEMENT is made the 28 April 2004


 


BETWEEN:


 


(1)                                 GEFA INTERNATIONAL
HOLDINGS, INC.
whose registered office is at 6604 West Broad Street, Richmond, VA 23230, USA
(“GEFA”); and


 


(2)                                 GE CAPITAL
CORPORATION whose
registered office is at Corporation Trust Center, 1209 Orange Street,
Wilmington, Delaware (“GECC”).


 


Collectively GEFA and GECC shall be referred
to as “the Parties” and each as a
“Party”.


 


RECITALS:


 


(A)                              GEFA is or will become the holding
company of each GEFA Company.


 


(B)                                GECF is the holding company of each
GECF Group Company who is party to existing insurance arrangements with GEFA
Companies.


 


(C)                                As at the date of this agreement
certain GEFA Companies provide Existing Payment Protection Products to certain
GECF Group Companies under the Existing Local Agreements.


 


(D)                               GECC intends to appoint the GEFA
Companies as the exclusive provider of Payment Protection Products to the GECF
Group Companies in the Territories subject to the terms and conditions of this
agreement and in return GEFA has agreed to provide market leading products and
services and to deliver its services hereunder to a world class standard.


 


(E)                                 The Parties have entered into this
agreement to give effect to their intention in relation to the Existing Local
Agreements and in relation to New Local Agreements and New Territories.


 


THE PARTIES AGREE AS FOLLOWS:


 


1                                         Definitions And Interpretation


 


1.1                               Definitions


 


The following words and expressions shall,
unless the context otherwise requires, have the following meanings:


 


“Acquired
GECF Business” has the meaning given to it in Clause 3.2.6;


 


“Amended
New Business Proposal” has the meaning given to it in paragraph 8.1
of Part A of Schedule 5;


 


“Applicable
Laws” means any of the following in force from time to time in any
of the Territories: any common law, statute, statutory instrument, treaty,
rule, regulation,


 

















 


directive, guideline, guidance, decision,
bylaw, code, order, notice, demand, decree, resolution or judgement or licence
conditions, or anything similar to any of the above in each case of a
Governmental Authority and which is binding on GECC or any GECF Group Company
or GEFA or any GEFA Company;


 


“Approved
Subcontractor” means any of (i) the existing sub-contractors used by
GEFA or a GEFA Company in connection with the provision of services to GECC or
a GECF Group Company at the Commencement Date; (ii) the persons, from time to
time, listed on the General Electric Group’s list of approved subcontractors;
or (iii) any other person who in the reasonable opinion of the parties meets
the due diligence requirements set out in Schedule 13 of this agreement;


 


“Benchmarking
Pool” means any company or organisation that offers Payment
Protection Products to consumers in one or more Territories;


 


“Best in
Class” means service levels, product development and related
services that are in the top 10 per cent. of Payment Protection Product
providers in the relevant Territory;


 


“Business”
means the provision, selling or distribution of Payment Protection Products by
the GECF Group Companies provided by the GEFA Companies under this agreement;


 


“Business
Day” means a day (other than a Saturday, Sunday or public holiday)
on which banks are open for business in London and, in relation to a GEFA
Company or GECF Group Company, a day (other than a Saturday, Sunday or public
holiday) on which banks are open for business in the place of business of that
GEFA Company or GECF Group Company;


 


“Claims
Frequency” means number of claims with a date of loss in the period
under investigation divided by Earned Exposure in the same period;


 


“Claims
Incurred” means claim payments plus Claims Reserves at the end of
the period under investigation minus Claims Reserves at the beginning of the
period under investigation;


 


“Claims
Performance Statement” means the statement to be prepared by GEFA in
accordance with clause 6.2 and Schedule 4;


 


“Claims
Reserves” means the provisions held in GEFA’s US GAAP balance sheet
in respect of all future payments on claims with a date of loss before the
balance date;


 


“Commencement
Date” means 1 January, 2004;


 


“Committed
Payments Product” means any of the following:


 


(a)                                  a product which protects regular
financial commitments due to a third party including gas, electricity, water
and telecommunications companies; and


 


2

















 


(b)                                 an extension of or variation to any
other Payment Protection Product distributed by GECF to protect payment
obligations due to persons other than GECF Group Companies;


 


“Comparable
GWP” means the aggregate GWP accruing to GEFA and the GEFA Companies
during the Previous Relevant Period in respect of all Policies in all
Territories sold during the Previous Relevant Period (excluding GWP which
accrued to GEFA and the GEFA Companies in relation to any Local Agreements
which were terminated pursuant to clause 20.4 during the course of the
Previous Relevant Period);


 


“Confidential
Information” means:


 


(a)                                  in relation to GEFA, all
information relating to GEFA’s or to any GEFA Company’s business, customers or
financial or other affairs which is not publicly known including information
relating to:


 


(i)                                     customer and supplier names and
other details of customers and suppliers, sales targets, sales statistics,
market share statistics, prices, market research reports and surveys; and


 


(ii)                                  future projects, business
development or planning, commercial relationships and negotiations or any
insurance product concepts, ideas or proposals of GEFA or any GEFA Company; and


 


(iii)                               designs, formulae, inventions or
improvements relating to products or prospective products designed or sold by
GEFA or any GEFA Company  or any other
trade secrets or know-how or financial information in relation to the
businesses, finances, dealings or affairs of GEFA or any GEFA Company;


 


(b)                                 in relation to GECC, all
information relating to any GECF Group Company’s business or financial or other
affairs which is not publicly known including information relating to:


 


(i)                                     customer and supplier names and
other details of customers and suppliers, sales targets, sales statistics,
market share statistics, prices, market research reports and surveys; and


 


(ii)                                  future projects, business
development or planning, commercial relationships and negotiations or any
insurance product concepts, ideas or proposals of any GECF Group Company; and


 


(iii)                               designs, formulae, inventions or
improvements relating to products or prospective products designed or sold by
any GECF Group Company or any other trade secrets or know-how or financial
information in relation to the businesses or finances of any GECF Group
Company;


 


3

















 


“Contract
Year” means each consecutive 12 month period from the Commencement
Date or its anniversary (as the case may be) until the next anniversary;


 


“Control”
means:


 


(a)                                  in relation to a body corporate,
the ability of a person (either alone or in conjunction with another person
pursuant to some agreement, arrangement or understanding) to ensure that the
activities and business of that body corporate are conducted in accordance with
the wishes of that person, and, without limitation, a person shall be deemed to
have “Control” of a body corporate
if:


 


(i)                                     that person (either alone or in
conjunction with another person pursuant to some agreement, arrangement or
understanding) is entitled to exercise 50 per cent. or more of the voting
rights which are ordinarily exercisable in a general meeting of that body
corporate;


 


(ii)                                  that person (either alone or in
conjunction with another person pursuant to some agreement, arrangement or
understanding) is entitled to appoint a majority of the board of directors of
the body corporate;


 


(iii)                               in the case of a body corporate
whose shares are not listed, quoted or dealt in on any securities or investment
exchange or quotation system that person (either alone or in conjunction with
another person pursuant to some agreement, arrangement or understanding) has
the right to receive the majority of the income of that body corporate on any
distribution by it of all of its income or the majority of its assets on a
winding-up; or


 


(b)                                 in relation to an entity not being
a body corporate, the power (either alone or in conjunction with another person
pursuant to some agreement, arrangement or understanding) to direct the
management or policies of such person, whether by operation of law, by contract
or otherwise;


 


“Data
Protection Legislation” means the Data Protection Act 1998 (UK), all
applicable legislation implementing European Community Directives 95/46 and
97/66 for EU countries and all applicable data protection legislation in any of
the Territories;


 


“Dispute”
has the meaning given to it in clause 15.3;


 


“Earned
Claims Fund” means Gross Earned Premium less Sales Commission
incurred less Earned Retention;


 


“Earned
Exposure” means the number of equivalent annual Policies in the
period under investigation;


 


“Eligible
GWP” means the aggregate GWP accruing to GEFA and the GEFA Companies
during the Relevant Period in respect of all Policies in all Territories  sold during the Relevant Period;


 


4

















 


“Earned
Retention” means an amount withheld by GEFA to cover the cost of
underwriting the Business expressed as a percentage of Gross Earned Premium
(the “Retention Rate”) to be subtracted from the Gross Earned Premium when
calculating the underwriting profit;


 


“Existing
Business” means the Existing Direct Business and Existing Reinsured
Business at the rates in existence at the Commencement Date to include any
renaming, rebranding, product change or variation thereto (including any
Substitute Business);


 


“Existing
Direct Business” means the Schemes in existence at the Commencement
Date as identified in Schedule 1 Part A;


 


“Existing
Local Agreements” means the agreements in place in each Existing
Territory at the Commencement Date, including any addendum thereto, and as
listed in Schedule 8;


 


“Existing
Payment Protection Products” means the payment protection insurance
policies and schemes in the Existing Territories as set out in parts A and B of
Schedule 1;


 


“Existing
Reinsured Business” means the Schemes in existence at the
Commencement Date as identified in Schedule 1 Part B;


 


“Existing
Territories” means Italy, Spain, Portugal, Norway, Denmark, Sweden,
United Kingdom, Ireland, Switzerland, Germany and France;


 


“Exit Phase”
means:


 


(a)                                  in the context of expiry of this
agreement or a Local Agreement, the period of 12 months prior to the date on
which this agreement or the relevant Local Agreement (as the case may be)
expires; and


 


(b)                                 in any other case, the period (with
a minimum of 90 days) stipulated in the relevant notice of termination of this
agreement or the relevant Local Agreement (as the case may be);


 


“Exit Plan”
has the meaning given to that term in clause 21.3.1;


 


“Financial
Services Regulator” means the Financial Services Authority in the
United Kingdom or any successor or replacement thereof or, in the case of a
Territory other than the United Kingdom, its equivalent;


 


“GECF
Captive” means a captive insurance company to be established by
GECC;


 


“GECF Group”
means any subsidiary of GECC from time to time (other than Acquired GECF
Business or GEFA Companies) who, from time to time, distributes Payment
Protection Products in conjunction with entering into consumer financing
agreements or arrangements where the relevant GECF Group Company (or a member
of its Group) acts as the provider of finance. “GECF Group Company” shall be construed accordingly;  Where GECF is successful in procuring that
Acquired GECF Business appoints a GEFA 


 


5

















 


Company as its exclusive provider of Payment
Protection Products pursuant to Clause 3.2.3, then this definition shall
automatically include such Acquired GECF Business;


 


“GECF Marks”
means the marks owned by the GECF Group or another member of the General
Electric Group which are used by the GEFA Group as at the Commencement Date to
fulfil their obligations under this agreement or any Local Agreement and any
additional marks agreed in writing between the Parties from time to time;


 


“GEFA
Company” means each of the companies listed in Schedule 9 and
any additional company as notified in writing to GECC by GEFA from time to
time;


 


“GEFA Group”
means GEFA and each of the GEFA Companies;


 


“GEFA Marks”
means the marks owned by Genworth Financial, Inc. or a member of its Group
which are used by the GECF Group as at the Commencement Date to fulfil their
obligations under this agreement or any Local Agreement and any additional
marks agreed in writing between the parties from time to time;


 


“GEFI
Guernsey” means Financial Insurance Guernsey PCC Limited;


 


“Good
Industry Practice” means, in relation to any particular
circumstances, the degree of skill, diligence, prudence, foresight and
operating practice which would reasonably and ordinarily be expected from a
reasonably skilled and experienced provider of Payment Protection Products and
related services of a similar type to the Payment Protection Products  and related services provided pursuant to
this agreement under the same or similar circumstances;


 


“Governmental
Authority” means any court, government, regulatory agency or regulatory
authority (in each case whether international, national or local and in any
jurisdiction), including the Financial Services Regulator;


 


“Group”
means, in relation to any person, that person, its holding companies and the
subsidiaries and subsidiary undertakings from time to time of such holding
companies, all of them and each of them as the context admits including any
joint venture companies, business relationships or any other business
relationship;


 


“Gross
Earned Premium” means the earning of the Gross Written Premium
according to the GEFA balance sheet for US GAAP results reporting purposes;


 


“Gross Loss
Ratio” means Ultimate Claims Cost 
divided by Gross Earned Premium;


 


“Gross
Written Premium” (or “GWP”)
means, in relation to any Policy, the total premium payable by an Insured
Customer in respect thereof less any Tax/levy and cancellations/refunds;


 


“Identified
New Business” means the Schemes as identified in Schedule 1
Part C;


 


“Incentive
Threshold” has the meaning given to it in clause 5.3;


 


6

















 


“Insolvent”
means in the case of any party the appointment of, the application for the
appointment of or any step taken with a view to the appointment of, a
liquidator, provisional liquidator, administrator, administrative receiver or
receiver or equivalent officer, the entering into or the taking of any step
with a view to the entering into of a scheme of arrangement or composition for
the benefit of creditors generally (including a voluntary arrangement under
Part 1 of the Insolvency Act 1986), any re-organisation, moratorium or other
administration involving its creditors or any class of its creditors, the
proposal or passing of a resolution or the convening of a meeting to consider a
proposal to wind it up (other than a voluntary winding-up as part of a
reorganisation) or the company becoming unable or being deemed to be unable to
pay its debts as and when they fall due within the meaning of section  123
of the Insolvency Act 1986 or anything equivalent or analogous to any of the
foregoing occurring in any jurisdiction;


 


“Insured”
and “Insured Customer” means any
GECF Group Company customer who has entered into a Policy provided:


 


(i)                                     by GEFA or a GEFA Company as the
primary insurer; or


 


(ii)                                  by a primary insurer for which GEFA
or a GEFA Company acts as a reinsurer;


 


“Key
Service Levels” means the Service Levels specified in Table B of
Schedule 2;


 


“Key
Territories” means United Kingdom, Germany and France and any other
Territory which accounts for more than 21,900,000 Euros of GWP in a Relevant
Period;


 


“Local
Addendum” means the addendum in the form set out in Schedule 11
to be entered into by the relevant GECF Group Companies with the relevant GEFA
Companies in accordance with clause 2.1 or 5.4.3 (as the case may be);


 


“Local
Agreements” means the Existing Local Agreements and the New Local
Agreements;


 


“Local
Comparable GWP” means the aggregate GWP accruing to a GEFA Company
during the Previous Relevant Period in respect of all Policies sold during the
Previous Relevant Period which relate to a particular Local Agreement the “Relevant Local Agreement”;


 


“Local
Eligible GWP” means the aggregate GWP accruing to a GEFA Company
during the Relevant Period in respect of all Policies sold during the Relevant
Period which relate to the Relevant Local Agreement;


 


“Local
Material Change” has the meaning given to it in clause 20.4.4;


 


“Loss Ratio”
means either Claims Incurred divided by the Earned Claims Fund as calculated
from the Profit Share Account or Ultimate Claims Cost divided by Earned Claims
Fund, as calculated in the Claims Performance Statement;


 


“Material
Change” has the meaning given to it in clause 20.2.3;


 


7

















 


“Net
Premium” means Gross Written Premium less any Sales Commission;


 


“New
Business” has the meaning given to it in clause 3.2.2 and, for
the avoidance of doubt, shall exclude Substitute Business;


 


“New
Business Proposal” has the meaning given to it in paragraph 5 of
Part A of Schedule 5;


 


“New
Captive” means any entity forming part of an Acquired GECF Business
which is the captive insurer of the Acquired GECF Business;


 


“New Direct
Business” means all New Business that is not New Reinsurance
Business and as agreed from time to time between the parties pursuant to
clause 5.4.1;


 


“New Local
Agreement” has the meaning given to it in clause 5.4.2;


 


“New
Payment Protection Products” means products within the definition of
Payment Protection Products but which are not Existing Payment Protection
Products;


 


“New
Reinsurance Business” means any New Business as agreed to be New
Reinsurance Business from time to time between the parties pursuant to
clause 5;


 


“New
Territories” means **, and such other countries as may be agreed in
writing between the Parties from time to time;


 


“Payment
Protection Products” means any of the following:


 


(a)                                  any insurance, guarantee or waiver
style product (howsoever described) which assists consumers in meeting some or
all of their payment obligations under financial commitments  (including without limitation mortgages,
personal and car loans and credit cards) which is linked to, or forms part of
or is financed under any underlying financing or credit agreement  or is a Committed Payments Product but
excluding mortgage indemnity insurance, GAP insurance, long term care insurance
and free-standing term life products and investment products, warranty, auto
insurance covering damage to car or property, personal accident, travel
insurance, and health cash plan; or


 


(b)                                 any product (howsoever described)
which provides for the suspension or forgiveness either temporarily or
permanently of any sort of debt owing by a consumer,


 


in each case including any derivatives or
variations of any such products and/or the administration and management of any
such products.


 


“Policies”
means the Payment Protection Products provided by GEFA Companies as either the
primary insurer or provider or the reinsurer (including the existing product
details set out in Schedule 1) and such Payment Protection Products which
GECF Group Companies are authorised to market and sell and which are brought
within the scope of 


 


8

















 


this agreement from time to time by the
execution of an addendum and “Policy”
shall be construed accordingly;


 


“Potential
New Business” has the meaning given to it in clause 3.2.1;


 


“Potential
Substitute Business” means any Potential New Business which falls
within the criteria set out in Schedule 15 Substitute Business Criteria;


 


“Previous
Relevant Period” means the period of 12 calendar months immediately
preceding the Relevant Period;


 


“Profit
Share” means the share (if any) of Underwriting Profits payable to
or by a GECF Group Company in accordance with clause 6.1;


 


“Profit
Share Account” has the meaning given to it in paragraph 1 of
Schedule 3;


 


“Quarterly
Performance Meeting” has the meaning given to it in Paragraph 1 of
Part A of Schedule 6;


 


“Regulatory
Event” means the receipt by a GEFA Company (the “Affected GEFA Company”) of a notice, from
the Financial Services Regulator of the Territory in which the relevant GEFA
Company operates, in which the Financial Services Regulator gives notice that
it intends to revoke or suspend any authorisation required by the relevant GEFA
Company to perform any of its obligations under this agreement or any Local
Agreement to which it is a party;


 


“Relevant
Period” means any period of 12 months during the Term starting on
the first day of a calendar month and ending on the last day of the calendar
month 12 months later;


 


“Replacement
Supplier” means any entity succeeding a GEFA Company in the
provision of Payment Protection Products substantially similar to those
provided under this agreement;


 


“Risk Loss
Ratio” means Ultimate Claims Cost divided by Earned Claims Fund;


 


“Risk Rate”
means that part of a premium which covers the expected costs of claims;


 


“Run-Off
Period” means the period commencing on the effective date of
termination or expiration of this agreement and ending when GEFA certifies to
GECF in writing that all risks under all Policies have expired and all valid
claims under all Policies have been finalised, and no further Claims Reserves
are required;


 


“Sales
Commission” means in relation to:


 


(a)                                  Existing Business and Identified
New Business, the proportion of Gross Written Premium payable by GEFA or a GEFA
Company to GECC as shown in Schedule 1; and


 


9

















 


(b)                                 New Direct Business and New
Reinsurance Business, the proportion of Gross Written Premium as agreed between
the relevant GECF Group Companies and the relevant GEFA Companies from time to
time;


 


“Scheme”
means a type or category of Policy marketed and sold by a GECF Group Company
pursuant to this agreement and/or any Local Agreement;


 


“Service
Credits” means the credits payable to the GECF Group in accordance
with Schedule 2;


 


“Service
Levels” means the service levels described in Schedule 2 as
amended or varied in accordance with this agreement;


 


“Substitute
Business” means Potential Substitute Business which following the
procedure set out in Clause 9 and Schedule 16 becomes Substitute
Business.


 


“Supplemental
Sales Commission” shall have the meaning given to it in
clause 5.3 and shall be calculated in accordance with Schedule 7;


 


“Tax/levy”
means any tax, levy or stamp duty or any charge payable in respect of insurance
premiums levied by any tax authority in any jurisdiction covered by this
agreement to be charged to Insured Customers at the applicable rate from time
to time including any similar, equivalent, additional or replacement tax, levy
or charge which may be imposed on or in relation to insurers or insurance
transactions from time to time;


 


“Term”
means the period of 5 (five) years following the Commencement Date;


 


“Territories”
means the countries comprising the Existing Territories and the New
Territories, and the term “Territory” shall mean any one of these;


 


“Ultimate
Claims Cost” means claims payments plus Claims Reserves for future
claims payments under the relevant Policies as at the date the Claims
Performance Statement described in Schedule 4 is calculated; and


 


“Underwriting
Profits” shall have the meaning given to it in Schedule 3,
paragraph 3(c).


 


1.2                               Interpretation


 


The following rules apply unless the context
requires otherwise:


 


1.2.1                     “holding company” and “subsidiary”
shall be construed in accordance with section  736 of the Companies Act
1985, “subsidiary undertaking” shall be construed in accordance with
section  258 of the Companies Act 1985 and “associated company” shall be
construed in accordance with section  416 of the Income and Corporation
Taxes Act 1988;


 


1.2.2                     the Interpretation Act 1978 shall
apply to this agreement in the same way as it applies to an enactment;


 


10

















 


1.2.3                     the words “including”, “include”
and “includes” shall mean “including without limitation”, “include without
limitation” and “includes without limitation”, as the case may be;


 


1.2.4                     a “person” includes any person,
individual, company, firm, corporation, government, state or agency of a state
or any undertaking or organisation (whether or not having separate legal
personality and irrespective of the jurisdiction in or under the law of which
it was incorporated or exists);


 


1.2.5                     any reference to a party to this
agreement includes its successors in title and permitted assignees;


 


1.2.6                     words denoting the singular shall
include the plural and vice versa and words denoting any gender shall include
all genders;


 


1.2.7                     references to any statute or
statutory provision shall be construed as a reference to the same as it may
have been, or may from time to time be, amended, modified or re-enacted;


 


1.2.8                     references to recitals, clauses,
paragraphs or schedules are to recitals, clauses and paragraphs of and
schedules to this agreement. The schedules form part of the operative
provisions of this agreement and references to this agreement shall, unless the
context otherwise requires, include references to the recitals and the
schedules;


 


1.2.9                     references to any agreement shall
be construed as a reference to that agreement as amended, varied, supplemented
or assigned from time to time;


 


1.2.10              if there is any inconsistency
between the schedules or any Addendum and the main body of this agreement, then
to the extent necessary to resolve such inconsistency the main body of this
agreement shall prevail;


 


1.2.11              the index to and the headings in
this agreement are for information only and are to be ignored for the purposes
of construing the same;


 


1.2.12              references to a statutory provision
include any subordinate legislation made from time to time under that
provision; and


 


1.2.13              if a word or phrase is defined, its
other grammatical forms have a corresponding meaning.


 


General Procurement Obligation


 


1.2.14              GECC shall procure that the GECF
Group Companies fulfil their obligations under this agreement and comply with
its terms.


 


11

















 


2                                         Local Agreements


 


2.1                               Local Addendums


 


The GECF Group Companies party to an Existing
Local Agreement shall, and GEFA shall procure that the relevant GEFA Companies
party to an Existing Local Agreement shall, promptly enter into a Local
Addendum to amend their Existing Local Agreement to give effect to the
provisions of this agreement mutatis mutandis (subject only to including
amendments or further provisions necessary to ensure compliance with Applicable
Laws), including:


 


2.1.1                     clause 2.3;


 


2.1.2                     clause 3.1 and 3.2 (in respect
of Existing Business, Substitute Business and Potential Substitute Business);


 


2.1.3                     clause 4;


 


2.1.4                     clause 6.1.1;


 


2.1.5                     clause 8;


 


2.1.6                     clause 9.1, 9.2, 9.4 and
Schedule 2;


 


2.1.7                     clause 10.2;


 


2.1.8                     clause 11;


 


2.1.9                     clause 12.1;


 


2.1.10              clause 13;


 


2.1.11              clause 15;


 


2.1.12              clause 16.2 and
Schedule 6 Part B;


 


2.1.13              clause 17;


 


2.1.14              clause 18;


 


2.1.15              clause 20.4;


 


2.1.16              clause 21.3;


 


2.1.17              clause 22;


 


2.1.18              clause 23; and


 


2.1.19              clause 24.


 


12

















 


2.1.20              In respect of each Local Addendum,
the assignment and subcontracting provisions incorporated by virtue of
clause 2.1.14 above shall be supplemented by the addition of the following
sub-clause:


 


“Notwithstanding anything in this
Clause [Assignment Clause], all of the rights and obligations of the
Financial Assurance Company Limited under this Agreement shall automatically
transfer to Financial New Life Company Limited upon the transfer scheme for the
transfer of all or substantially all of Financial Assurance Company Limited’s
business to Financial New Life Company Limited pursuant to section  105
Financial Services and Markets Act 2000 becoming effective (with such
amendments, deletions or additions to the scheme as the parties to the scheme
may approve).”


 


2.1.21              GECC and GEFA shall procure that
each Existing Local Agreement shall be amended to delete any provision which
confers on any GECF Group Company which is a party to such Local Agreement any
right to terminate such Local Agreement on a sale or disposal affecting the
whole of or any part of any party to that Local Agreement (in either case,
whether such sale or disposal is effected by way of an asset or business sale
or a share sale or otherwise (including by the sale of a portfolio or by a
change of the identity of the financing provider)).


 


2.2                               Inconsistency between this Agreement
and Local Agreements


 


Without prejudice to Clause 2.1, where
there is a conflict or inconsistency between this agreement and a Local
Agreement, the terms of this agreement shall prevail, except in relation to:


 


(a)                                  provisions in Local Agreements that
are necessary to ensure compliance with Applicable Laws; and


 


(b)                                 provisions in Existing Local
Agreements relating to sales commission, Retention Rates and the calculation of
Profit Share,


 


and accordingly, GEFA will procure that each
GEFA Company shall, to the extent relevant, comply with the provisions of this
agreement and GECF will procure that each GECF Group Company shall, to the
extent relevant, comply with the provisions of this agreement.


 


2.3                               Term of Local Agreements


 


The Parties hereby agree and shall procure
that notwithstanding the expiry dates specified in the Local Agreements, the
term of each Local Agreement will be extended until close of business on the
day preceding the fifth anniversary of the Commencement Date and shall not be
varied during the Term unless both Parties agree otherwise.


 


13

















 


3                                         Exclusive Appointment


 


3.1                               Exclusive Appointment in respect of
Existing Business


 


With effect from no later than the
Commencement Date the GECF Group Companies shall appoint GEFA or the relevant
GEFA Companies as their exclusive provider of Existing Payment Protection
Products in the Existing Territories.


 


3.2                               Exclusive Appointment in respect of
Identified New Business and New Business and Substitute Business


 


3.2.1                     Potential New Business shall
consist of a GECF Group Company’s requirements for, in the case of an Existing
Territory or New Territory:


 


(a)                                  New Payment Protection Products;


 


(b)                                 Payment Protection Products to be
provided to an Acquired GECF Business; or


 


(c)                                  Identified New Business,


 


and any related services.


 


3.2.2                     Potential New Business shall become
New Business in accordance with and subject to the provisions of Clauses 9.4
and Schedule 5. Potential Substitute Business shall become Substitute
Business in accordance with and subject to the provisions of Clauses 9.4 and
Schedule 16.


 


3.2.3                     Subject to clause 3.2.6,
20.4.1 and Schedule 5 and Schedule 15 (Potential Substitute
Business), the relevant GECF Group Company shall appoint GEFA or the relevant
GEFA Company as its exclusive provider of Payment Protection Products in the
Territories in respect of New Business and Substitute Business.


 


3.2.4                     During the Term and in respect of
Territories covered by a Local Agreement, GECC will ensure that no GECF Group
Company other than in accordance with this agreement will offer to any third
party or GECF Group Company customer any Payment Protection Product in any
Territory which is in competition with, or interferes with or restricts the
sale or provision of any Payment Protection Product provided by GEFA or any
GEFA Company pursuant to the relevant Local Agreement;


 


provided that nothing in this
Clause 3.2.4 shall prevent:


 


(i)                                     the GECF Captive from providing
Payment Protection Products in the Territory provided that it does so in
accordance with the terms of clause 5.2 of this agreement;


 


14

















 


(ii)                                  any New Captive from providing on
an ongoing basis Payment Protection Products in the relevant Territory to third
parties and customers of the Acquired GECF Business of which it forms
part.  Save as provided in this
agreement, the New Captive shall not supply Payment Protection Products to GECF
Group Companies other than the Acquired GECF Business of which it forms part;
and


 


(iii)                               GECF Group Companies from
concluding arrangements pursuant to Clause 9.4.6.


 


3.2.5                     Schedule 1C sets out in
respect of all Identified New Business production estimates and whether
premiums are single or monthly **.


 


(i)                                     In respect of Potential New
Business (where an addendum to a Local Agreement or a New Local Agreement in
respect of such Potential New Business has been agreed pursuant to
Schedule 5):


 


(a)                                  The GECF Group Companies shall not
** relating to the provision of Payment Protection Products (where such **
would be in breach of an addendum to a Local Agreement or a New Local Agreement
as agreed pursuant to Schedule 5); and


 


(b)                                 The GECF Group Companies shall not
unless GEFA requests be required to ** any ** the ** of their **. If GEFA
requests a relevant GECF Group Company to ** relating to the provision of
Payment Protection Products other than upon **, such relevant GECF Group
Company shall do so in accordance with the terms of the relevant arrangement
and on condition that:


 


(I)                                    if such ** relates to Identified
New Business, GEFA ** the relevant GECF Group Company for ** of which GEFA was
aware at the Commencement Date ** by the relevant GECF Group Company
specifically in relation to such **; or


 


(II)                                if such ** relates to New Business
(not being Identified New Business), GEFA ** the relevant GECF Group Company
for ** incurred by the relevant GECF Group Company as a consequence of ** and
any ** pursuant to the relevant agreement.


 


(ii)                                  In respect of Potential New
Business (where an addendum to a Local Agreement or a New Local Agreement in
respect of such Potential New Business has been agreed pursuant to
Schedule 5), the relevant GECF Group Company agrees that subject to
Clause 3.2.5(i)(b), where expressly permitted in the relevant arrangement,
it shall use all 


 


15

















 


reasonable endeavours to **, and the GECF
Group Companies shall use all reasonable endeavours to **, any and all **
relating to the provision of Payment Protection Products.


 


3.2.6                     Where GECC or a GECF Group Company
acquires a business or establishes any joint venture or partnership or any
other business relationship in a Territory (an “Acquired GECF Business”) GECC shall, and GECC or the relevant
GECF Group Company shall, use its reasonable efforts to ensure that the terms
of the acquisition or establishment of the Acquired GECF Business neither **:


 


(a)                                  GECC from ** that the Acquired GECF
Business appoint a ** as its **; and


 


(b)                                 the Acquired GECF Business from **
as its **.


 


In the event that GECC or the relevant GECF
Group Company is, notwithstanding their reasonable efforts, unable to negotiate
the terms of the acquisition or establishment of the Acquired GECF Business
without the inclusion of ** which fall within paragraphs (a) and/or (b) above,
GECC shall, and shall procure that the relevant GECF Group Company shall, use
its reasonable efforts to procure that the terms of the acquisition or
establishment ** as closely as reasonably possible ** as set out in this agreement
that ** shall be appointed ** to the **. 
Such efforts shall include ** to the maximum extent reasonably possible
the terms of the acquisition or establishment which relate to:


 


(i)                                     the ** to which such arrangements
apply;


 


(ii)                                  the ** of such arrangements; and


 


(iii)                               the ** of such arrangements.


 


3.2.7                     GECC undertakes that it shall not
acquire an interest in or establish, or take any steps to acquire an interest
in or establish, any joint venture or partnership or any other business
relationship (or permit any GECF Group Company to do any such thing) with the
intention of avoiding any of its obligations under this agreement.


 


3.2.8                     GECC represents and warrants to
GEFA that all Identified New Business is owned as to 100 per cent. by GECC or
the relevant GECF Group Company.


 


3.2.9                     In the event of a termination of a
Local Agreement, the relevant GECF Group Company which was party to such Local
Agreement shall no longer be required to appoint, a GEFA Company as its
exclusive provider of Payment Protection Products provided under that Local
Agreement in a Territory. Where as a result of such termination there are no
Local Agreements in the Territory then the requirements of this Clause 3
on GECC and the GECF Group Companies shall no longer apply in respect of that
Territory.


 


16

















 


4                                         Regulatory Requirements


 


4.1                               GEFA shall, and shall procure that
each GEFA Company shall, and each GECF Group Company shall, have in place
appropriate policies and procedures to ensure observation of and compliance
with all Applicable Laws (including, all current and any future regulatory
requirements, all applicable accounting rules and all codes of practice
applicable to its Business activities in each relevant Territory) in the performance
of their respective obligations, or the exercise of its rights, under or in
connection with this agreement or Local Agreement, as the case may be, from
time to time.


 


4.2                               In the event that there are any
changes to an applicable regulatory regime within a Territory which will impact
on the sale or distribution of Payment Protection Products under this agreement
or the ability of GEFA or a GEFA Company to meet its Service Level obligations,
GEFA shall inform GECC, as soon as reasonably practicable after such change,
and the Parties shall work together to agree a plan to enable the Parties to
continue to perform their obligations under this agreement (the “Remediation
Plan”). If the parties cannot agree a Remediation Plan within 10 Business Days
of notice by GEFA, then the matter will be referred to the dispute resolution
procedure in Clause 15.


 


4.3                               The Parties agree that if as a
result of any changes in applicable law, regulation or regulatory requirements
or GECC re-organisation:


 


(a)                                  the Tax/ levy in a Territory
increases, any such increase shall be absorbed by the relevant GECF Group
Company in that Territory; and/or


 


(b)                                 any GEFA Company is required to
vary the level of regulatory capital maintained by it in respect of any Payment
Protection Products underwritten and/or provided by GEFA pursuant to this
agreement or any Local Agreement then GECC shall send to GEFA a written
proposal setting out the steps to be taken so as to ensure that the relevant
GEFA Company’s regulatory capital requirement is the same as it was before any
such changes.  Within 5 Business Days of
the date of issue of such proposal, the Parties shall commence working together
with each using its best efforts to implement the proposal unless, before the
expiry of such period of 5 Business Days, GEFA informs GECC in writing that, in
its reasonable opinion, GEFA considers that the proposal will not have the
effect of ensuring that the relevant GEFA Company’s regulatory capital
requirement is the same as it was before such changes, in which case the
Parties shall negotiate in good faith such amendments to the proposal as are
necessary to achieve this effect. If the Parties fail to agree the necessary
amendments to the proposal within 30 Business Days of the date of commencement
of the negotiations, the changes to pricing shall be effected by the
application of the provisions of Schedule 4.


 


17

















 


4.4                               Benefits of Changes


 


If the parties jointly devise a method
(whether under clause 4.3 above or otherwise) which improves GEFA’s and/or
a GEFA Company’s regulatory capital requirement as regards Payment Production
Products provided pursuant to this agreement, GECC shall be entitled to the
financial benefit of such improvement in regulatory capital requirement.


 


5                                         Financial Terms


 


5.1                               Existing Direct Business and
Substitute Business


 


Subject to clause 2, the Parties agree
that all Existing Direct Business and Substitute Business shall continue to be
underwritten on the terms set out in the Existing Local Agreements, as detailed
in Part A of Schedule 1.


 


5.2                               Existing Reinsured Business


 


5.2.1                     Subject to clauses 2 and 5.2.2 the
Parties agree that the Existing Reinsured Business shall continue on the terms
set out in Part B of Schedule 1.


 


5.2.2                     When GECC has established the GECF
Captive and the necessary arrangements are in place to allow the primary
reinsurer to cede to GEFI Guernsey, the Existing Reinsured Business shall be
migrated to become New Reinsurance Business (in accordance with Clause 5.6).  Each Scheme to be migrated, and the
timetable for such migration, shall take effect according to the terms of
proposals which shall be issued in writing from GECC to GEFA promptly upon the
necessary arrangements being put in place, unless GEFA within 10 Business Days
of the issue of any such proposal sends notice in writing to GECC that it, in
its reasonable opinion, considers the terms or timetable for the relevant
migration to be impractical, in which case the Parties shall negotiate in good
faith such amendments to the relevant proposal as are necessary to allow the
relevant Existing Reinsured Business to be migrated to the New Reinsurance
Business to the satisfaction of the Parties, such Schemes continuing on the
terms of Existing Business until the Parties reach agreement. Those Schemes
that are not migrated will continue on the terms of Existing Reinsured Business
in Schedule 1. For the avoidance of doubt, once any Existing Reinsured
Business has been migrated it will still form part of the volume incentive
calculations referred to in clause 5.3 below.


 


5.2.3                     The Parties agree and acknowledge
that, in some of the Existing Business, GEFA or a GEFA Company acts as either
the direct insurer or as a reinsurer to a primary insurer selected by GECC (the
“Existing Reinsurance Arrangements”).
GECC agrees that following termination of the Existing Reinsurance Arrangements
with the primary insurer in accordance with clause 5.2.1, it will ensure
that GEFA’s or a GEFA Company’s quota share is the same as that which existed
under the previous primary insurer arrangements.


 


18

















 


5.3                               Volume Incentive


 


If the aggregate of the Gross Written Premium
attributable to the Existing Direct Business, 
the Gross Written Premium for the Existing Reinsured Business and the
Gross Written Premium attributable to any Substitute Business is in excess of
Euro ** million (the “Incentive Threshold”)
per calendar year as calculated in accordance with Schedule 7, then GEFA
shall pay, or procure payment by the relevant GEFA Company, to GECC or its
nominee as notified by GECC to GEFA from time to time a supplemental sales
commission calculated on the amount of Gross Written Premium attributable to
the Existing Direct Business in excess of the Incentive Threshold in accordance
with Schedule 7 (the “Supplemental Sales
Commission”). Any Supplemental Sales Commission due to GECC under
this clause shall be paid annually in arrears within 100 days of the
calendar year-end, with the first such payment being due to GECC within 100
days of 31st December 2004.  For
the avoidance of doubt, no Supplemental Sales Commission shall be payable in
respect of Gross Written Premium for the calendar year ending 31st December 2003.


 


5.4                               New Business


 


5.4.1                     New Business may be New Direct
Business or New Reinsurance Business as determined in accordance with
Schedule 5.


 


5.4.2                     Any New Local Agreement entered
into relating to New Business in a Territory where there is no Local Agreement
shall be in the form set out in Schedule 12 and shall give effect to the
following provisions of this agreement, subject to the Applicable Laws:


 


(a)                                  the term of the New Local Agreement
shall be from the date of the New Local Agreement and expire on 31
December 2008;


 


(b)                                 clause 3.2;


 


(c)                                  clause 4;


 


(d)                                 clause 5.5 or 5.6 (as
applicable);


 


(e)                                  clause 6.1.2 and
Schedule 3;


 


(f)                                    clause 8;


 


(g)                                 clause 9.1, 9.2, 9.4 and
Schedule 2;


 


(h)                                 clause 10.2;


 


(i)                                     clause 11;


 


(j)                                     clause 12.2;


 


19

















 


(k)                                  clause 13;


 


(l)                                     clause 15;


 


(m)                               clause 16.2 and
Schedule 6 Part B;


 


(n)                                 clause 17;


 


(o)                                 clause 18;


 


(p)                                 clause 20.4;


 


(q)                                 clause 21.3;


 


(r)                                    clause 22;


 


(s)                                  clause 23; and


 


(t)                                    clause 24.


 


(u)                                 In respect of each New Local
Agreement, the assignment and subcontracting provisions incorporated by virtue
of clause 5.4.2(q) above shall be supplemented by the addition of the
following sub-clause:


 


“Notwithstanding anything in this
Clause [Assignment Clause], all of the rights and obligations of the
Financial Assurance Company Limited under this Agreement shall automatically
transfer to Financial New Life Company Limited upon the transfer scheme for the
transfer of all or substantially all of Financial Assurance Company Limited’s
business to Financial New Life Company Limited pursuant to section  105
Financial Services and Markets Act 2000 becoming effective (with such
amendments, deletions or additions to the scheme as the parties to the scheme
may approve).”


 


(v)                                 For the avoidance of doubt, no New
Local Agreement shall contain any provision which confers on the GECF Group
Company which is a party to such Local Agreement any right to terminate such
Local Agreement on a sale or disposal affecting the whole of or any part of any
party to that Local Agreement (in either case, whether such sale or disposal is
effected by way of an asset or business sale or a share sale or otherwise
(including by the sale of a portfolio or by a change of the identity of the
financing provider)).


 


Once executed, this shall become a “New Local Agreement”.


 


5.4.3                     The Parties agree that in respect
of Identified New Business and New Business in Territories subject to a Local
Agreement, the relevant GECF Group Company shall, and GEFA shall procure that
the relevant GEFA Company shall, either:


 


20

















 


(i)                                     enter into an addendum or variation
to the Local Agreement and that, subject to Clauses 5.5 and 5.6 below, such
Identified New Business or New Business shall be subject to the terms of that
Local Agreement; or


 


(ii)                                  enter into a New Local Agreement.


 


5.5                               New Direct Business


 


Subject to Paragraph 5.2.2 of Part A of
Schedule 5, New Direct Business will be subject to a GEFA Retention Rate
of ** per cent. of Gross Written Premium and a ** GECC: GEFA Profit Share
split.


 


5.6                               New Reinsurance Business


 


5.6.1


 


(a)                                  Subject to Paragraph 5.2.2 of Part
A of Schedule 5, when all necessary arrangements are in place with the
primary reinsurer GECC will ensure that all Net Premium is duly ceded to GEFI
Guernsey and that GEFI Guernsey receives a Retention Rate of **% of Gross
Written Premium.


 


(b)                                 In respect of all New Reinsurance
Business, GEFA will pay the primary reinsurer **% Profit Share.  It is GECC’s responsibility to ensure that
all necessary arrangements are in place with the primary reinsurer to ensure
GECC receives any monies owing to GECC from the primary reinsurer under any
arrangement or agreement between the primary reinsurer and GECC.  Neither GEFA or any GEFA Company shall have
any liability or responsibility in respect of any monies owing between the
primary reinsurer and GECC or to ensure any payments are made to GECC.


 


(c)                                  In the event that the New
Reinsurance Business arrangements are not capable of being established in
accordance with this clause 5.6 or cease to be effective for any reason
during the Term, including for legal or regulatory prohibitions, then all New
Reinsurance Business shall revert to either the Existing Business terms or New
Direct Business terms, at the discretion of GECC which shall be communicated in
writing to GEFA promptly following any such failure and which decision shall be
binding upon GEFA unless, within 20 Business Days of the notice from GECC,  GEFA (acting reasonably) objects in writing
to the decision of GECC, in which case the matter shall be referred to the next
Quarterly Performance Meeting for good faith negotiations between the Parties.
Where, in the process of any good faith negotiations, the Parties agree a
structure substantially similar to the current structure whereby the relevant
GEFA Company acts as a reinsurer (whether primary, secondary or other), the
Retention Rate will be that referred to in Clause 5.6.1(a). If any other
structure is proposed then the Parties will enter into good faith negotiations
to agree the pricing structure, taking into account all relevant 


 


21

















 


factors including any capital adequacy
requirements of the relevant GEFA Company and GECF Group Company.


 


6                                         Pricing - Profit Share and Financial Performance


 


6.1                               Profit Share - calculation and
payment


 


6.1.1                     The Parties agree that in respect
of Existing Business, the calculation, payment and treatment of Profit Share
during the term of and after termination or expiry of the Local Agreement shall
continue in accordance with the terms of the relevant Local Agreement.


 


6.1.2                     The Parties agree that in respect
of New Business, the relevant GECF Group Companies shall and GEFA shall procure
that the relevant GEFA Companies shall incorporate terms for the calculation, payment
and treatment of Profit Share in respect of the New Business in the relevant
New Local Agreements in accordance with Schedule 3.


 


6.2                               Financial Performance


 


The Parties agree to monitor the performance
of the Payment Protection Products provided under this agreement in each
Territory in accordance with the procedures set out in Schedule 4.


 


7                                         Marketing


 


Any marketing expenditure shall be determined
between the Parties at a Territory level based on a cost / benefit analysis.


 


8                                         Non Solicit


 


During the Term, GEFA will ensure that no
GEFA Company or member of Genworth Financial Inc.’s Group (with the exception
of any GECF Group Companies) will directly canvass or solicit the custom of any
customer of a GECF Group Company in any Territory in respect of any Payment
Protection Product without the express written consent of GECC. GECC accepts
that GEFA and any GEFA Company may notwithstanding this Clause 8 or any
other provision of this agreement indirectly provide Payment Protection
Products to a customer of a GECF Group Company via GEFA or a GEFA Company
client or customer.


 


9                                         Service Levels, Service Credits, Product Development and Good Industry
Practice


 


9.1                               Service Levels and Service Credits


 


9.1.1                     The Parties hereby agree that GEFA
shall procure that the GEFA Companies comply with the Service Levels  in accordance with Schedule 2.


 


22

















 


9.1.2                     Without prejudice to GECC’s or any
GECF Group Company’s other rights or remedies under this agreement, GEFA shall
procure that if a GEFA Company fails to meet the Key Service Levels, Service
Credits shall be applied in accordance with Schedule 2.


 


9.1.3                     The provisions of clause 9.1.2
shall not apply in respect of breaches of Key Service Levels that occur within
the first 6 months of the Term.


 


9.2                               Good Industry Practice


 


9.2.1                     GEFA shall, and shall procure that
the GEFA Companies shall, carry out their respective obligations under this
agreement and the Local Agreements in accordance with Good Industry Practice.


 


9.2.2                     GEFA shall, and shall procure that
the GEFA Companies shall, ensure that in the performance of their obligations
they remain Best in Class throughout the Term. 
Any productivity gains or costs associated with remaining Best In Class
shall be for the account of GEFA or the relevant GEFA Company.


 


9.3                               Service Level Review


 


9.3.1                     Without limiting any other
obligations under this agreement, on or before 90 days prior to each
anniversary of the Commencement Date, the Parties shall review the Service
Levels and shall amend them to ensure the Service Levels are and remain Best in
Class.  Where such amendments are
required, they shall be implemented by GEFA with effect from the anniversary of
the Commencement Date.


 


9.3.2                     GECC may engage a third party for
the purposes of conducting a review of the kind described in Clause 9.3.1.
GECC shall procure that the third party (the “Independent
Consultant”) executes a confidentiality agreement in a form
reasonably acceptable to GEFA.


 


9.3.3                     GEFA must make available a suitably
qualified and experienced employee for up to ten days per annum to provide all
necessary data and other information to GECC and any Independent Consultant
engaged by GECC for the purposes of completing the review under
Clause 9.3.1.


 


9.3.4                     If the Parties are not able to
reach agreement on amendments required to the Service Levels in accordance with
Clause 9.3.1, then that issue may be referred by either party to the
Dispute procedure set out in Clause 15 for resolution.


 


9.4                               Product Development and Marketing


 


9.4.1                     GEFA shall, or shall procure that
the GEFA Companies shall, offer to the GECF Group Companies all:


 


(a)                                  Payment Protection Products;


 


23

















 


(b)                                 features of such Payment Protection
Products; and


 


(c)                                  related marketing services,


 


that are offered to consumers in the relevant
Territory.


 


9.4.2                     GEFA shall, or shall procure that
the GEFA Companies shall, produce a quarterly report advising the GECF Group
Companies on the latest market developments in respect of Payment Protection
Products and advising the GECF Group Companies on new products, new product
features and new marketing channels and methods that GECF Group Companies
should consider adopting in order to be a market leading provider of Payment
Protection Products.


 


9.4.3                     Any GECF Group Company may at any
time request that GEFA or a GEFA Company provide any Payment Protection
Products, features of Payment Protection Products (provided that such features
are not mutually exclusive) and/or related marketing services whether or not
contained in the reports prepared by any GEFA Company pursuant to
Clause 9.4.2 (together “Offering(s)”)
that any GECF Group Companies wish GEFA or any GEFA Company to provide.


 


9.4.4                     In respect of each Offering(s)
requested by any GECF Group Company, GEFA will as soon as reasonably
practicable and in any event not later than 20 Business Days after receiving
the request either:


 


(a)                                  provide the relevant GECF Group
Company with a product development plan (“Product
Development Plan”) for the creation and delivery of the relevant
Offering(s).  The Product Development
Plan will:


 


(i)                                     identify (with an explanation and
reference to Schedule 15) whether the Offering will be considered as
Potential New Business or Potential Substitute Business for the purpose of this
agreement;


 


(ii)                                  include a detailed specification of
the Payment Protection Product, the features of the Payment Protection Product
and/or related marketing services (as the case may be) that the relevant GECF
Group Company wants included in the Offering and/or GEFA would be prepared to
develop (the “GEFA Proposal”);


 


(iii)                               provide a reasonable timeframe for
the creation and delivery of the Offering and/or the GEFA Proposal as the case
may be, taking into consideration the complexity of the products and services,
the regulatory environment in the relevant Territory, and the need for the GECF
Group Companies to maintain their position as a market leading provider of
Payment Protection Products.  The
relevant GECF Group Company shall not unreasonably withhold or delay its
agreement to such timeframe; or


 


24

















 


(b)                                 decline to develop the Offering in
which case they will also provide detailed written reasons for declining to
develop the Offering.


 


The relevant GECF Group Company shall provide
such information as the relevant GEFA Group Company shall reasonably request in
order for the relevant GEFA Company to formulate its response pursuant to this
Clause 9.4.4.  Such information
shall be deemed to form part of the Offering.


 


9.4.5                     If GEFA provides the relevant GECF
Group Company with a  Product
Development Plan which includes a GEFA Proposal pursuant to
Clause 9.4.4(a)(ii) then:


 


(i)                                     the relevant GECF Group Company may
accept the GEFA Proposal in which case it shall then notify GEFA that it
intends to substitute the GEFA Proposal for the relevant Offering(s) and
proceed in accordance with Clause 9.4.9; or


 


(ii)                                  the relevant GECF Group Company may
reject the GEFA Proposal and then proceed in accordance with Clause 9.4.6.


 


9.4.6                     Where the relevant GECF Group
Company rejects the GEFA Proposal or GEFA declines to develop any Offering(s),
subject to 9.4.14, GECC and the relevant GECF Group Company shall have no
obligation to appoint GEFA or any GEFA Company as its exclusive provider in
respect of the relevant Local Agreement in respect of the Offering(s) and GECC
and the relevant GECF Group Company shall be free to enter into discussions,
tenders, negotiations, arrangements and agreements with third parties and/or
other GECF Group Companies in respect of the relevant Offering(s). The relevant
GECF Group Company shall invite GEFA to take part in any subsequent tender
process conducted by the relevant GECF Group Company in respect of the
Offering(s) provided that GEFA agrees and shall procure that the relevant GEFA
Company agrees that the provisions for determining the Retention Rate and the
Risk Rate for the Offering as set out in Part II or Part III (as the case may
be) of Schedule 16 (Business Proposal Pricing Process) shall apply to
their submission save that, if an Actuary were to determine the Risk Rate
pursuant to Paragraphs 5 or 9.2 of Schedule 16 (as the case may be), then
the relevant GECF Group Company or the relevant GEFA Company would be entitled
to reject the proposed Risk Rate. In either case, the relevant GECF Group
Company would be entitled to award the tender to any third party.


 


9.4.7                     GEFA’s submission in accordance
with Clause 9.4.4 shall be considered to be the creation of a “Product
Development Plan” for the purpose of GEFA’s compliance with Paragraph 6.3 of
Part A of Schedule 5;


 


9.4.8                     If the Parties cannot agree whether
the Offering constitutes Potential New Business or Potential Substitute
Business then the Parties shall refer the matter to the dispute resolution
procedure set out in Clause 15.


 


25

















 


9.4.9                     The relevant GECF Group Company
will then review the Product Development Plan and where the Offering
constitutes:


 


(a)                                  Potential New Business the Parties
will initiate the process set out in Schedule 5 (for New Business); or


 


(b)                                 Potential Substitute Business, the
Parties will initiate the process set out in Schedule 16 (for Substitute
Business).


 


9.4.10              Where Potential Substitute Business
is determined through the Schedule 16 process to be Substitute Business or
Potential New Business is determined pursuant to the process in Schedule 5
to be New Business (as the case may be) GEFA shall, or shall procure that the
relevant GEFA Company shall, make the Offering (including any amendments
thereto agreed between the Parties) available to the relevant GECF Group
Company in accordance with the terms of the Local Addendum or New Local
Agreement agreed between the Parties.


 


9.4.11              Where the relevant GEFA Company and
GECF Group Company are unable to agree on whether the timetable set out in the
Product Development Plan is reasonable, having regard to the factors set out in
Clause 9.4.4(a)(iii), either Party may refer the matter to the dispute resolution
procedure set out in Clause 15.


 


9.4.12              Where the Offering is (i) Potential
Substitute Business and is determined not to be Substitute Business pursuant to
Schedule 16; or (ii) Potential New Business and is determined not to be
New Business pursuant to the process set out in Schedule 5 then (subject
to Clause 9.4.13 and 9.4.14) GECC and the relevant GECF Group Company
shall have no obligation to appoint GEFA or any GEFA Company as its provider,
whether exclusive or otherwise, in respect of the relevant Local Agreement in
respect of the Offering and GECC shall be free to enter into discussions,
tenders, negotiations, arrangements and agreements with third parties and/or
other companies in the GECF Group in respect of the relevant Offering.


 


9.4.13              If GEFA or a GEFA Company make a
GEFA Proposal in accordance with Clause 9.4.4 and the relevant GECF Group
Company at any time during the Term of the relevant Local Agreement pursuant to
which the GEFA Proposal was made decides to implement the GEFA Proposal with a
third party, then the relevant GECF Group Company shall be required to make a
request pursuant to Clause 9.4.3 of the agreement.


 


9.4.14              Where a tender process results
pursuant to Clause 9.4.6 or 9.4.12, if:


 


(i)                                     a change is proposed to the Offering(s)
during the tender process; and


 


(ii)                                  the result of such change is that
the reason GEFA declined to develop the Offering no longer applies,


 


then the relevant GECF Group Company shall
notify the relevant GEFA Company and both Parties shall be obliged to follow
the procedure in Clause 9.4.3,


 


26

















 


save that Clause 9.4.4(b) shall not
apply and the GEFA Company shall not have the option of providing a GEFA
Proposal pursuant to Clause 9.4.4(a)(ii). 
For the avoidance of doubt, the tender process shall not be reactivated
until such time as the GECF Group Company would be entitled to proceed to
tender pursuant to Schedule 5 or Schedule 16.


 


9.4.15              The Parties shall from time to time
throughout the term of this agreement conduct a benchmarking exercise in
respect of the Payment Protection Products and related marketing services
provided pursuant to this agreement and GEFA’s obligations pursuant to Clauses
9.4.1 and 9.4.2.


 


9.4.16              Any benchmarking exercise must be initiated
and conducted in accordance with Schedule 14.


 


9.4.17              The first benchmarking exercise
shall be completed by 30 September 2004 and subsequent benchmarking
exercises shall be carried out at six month intervals thereafter.


 


9.5                               In the event that GECC or a GECF
Group Company considers that GEFA or a GEFA Company is failing to comply with
its obligations under clauses 9.2, 9.4.1 and 9.4.2, the Parties shall discuss
the issue at the next following monthly meeting held in the relevant Territory
pursuant to paragraph 2 of part B of Schedule 6.  If the relevant representatives attending such meeting are unable
to agree the action to be taken to resolve the issue, the matter shall, within
10 Business Days of such failure to agree, be referred to the Relationship
Managers of GECC and GEFA who shall negotiate in good faith to resolve the
matter.


 


10                                  Intellectual Property, Data and Data
Protection


 


10.1                        Licence of Intellectual Property


 


10.1.1              GECC licenses the GECF Marks to
GEFA and the GEFA Companies for the Term and during the Run-Off Period for the
purposes of this agreement in the Territories. All use of GECF Marks pursuant
to this clause shall be subject to and in accordance with any trade mark
use guidelines notified to GEFA by GECC in writing from time to time.


 


10.1.2              GEFA licenses the GEFA Marks to
GECC and the GECF Group Companies for the Term and during the Run-Off Period
for the purposes of this agreement in the Territories. All use of the GEFA
Marks pursuant to this clause shall be subject to and in accordance with
any trade mark use guidelines notified to GECF by GEFA from time to time in
writing. For the avoidance of doubt, GECC has no obligation to use the GEFA
Marks.


 


10.1.3              GECC shall indemnify GEFA and each
member of the GEFA Group (each an “Indemnified
Person”) in respect of any loss, cost, damage, liability or expense
(including reasonable legal fees) suffered or incurred by an Indemnified Person
in connection with any claim or action brought against that Indemnified Person
to 


 


27

















 


the effect that the use of the GECF Marks
infringes the intellectual property rights of any third party, provided that
(i) notice is given of any such claim or action so as to permit the person who
owns the GECF Marks to assume and control the defence thereof and (ii) the
person seeking to be indemnified under this clause does not enter into any
settlement with respect to or compromise any such claim or action without the
indemnifying party’s prior written consent.


 


10.1.4              GEFA shall indemnify GECC and each
member of the GECF Group (each an “Indemnified
Person”) in respect of any loss, cost, damage, liability or expense
(including reasonable legal fees) suffered or incurred by an Indemnified Person
in connection with any claim or action brought against that Indemnified Person
to the effect that the use of the GEFA Marks infringes the intellectual
property rights of any third party, provided that (i) notice is given of any
such claim or action so as to permit the person who owns the GEFA Marks to
assume and control the defence thereof and (ii) the person seeking to be
indemnified under this clause does not enter into any settlement with
respect to or compromise any such claim or action without the indemnifying
party’s prior written consent.


 


10.1.5              Each Party (each individually a “Using Party”) acknowledges that all
goodwill associated with the use by it of each of the GECF Marks or the GEFA
Marks (as applicable) vests and shall vest in the owner of such mark and that
the Using Party has no, and shall not by virtue of this agreement obtain any,
rights in any of the GECF Marks or the GEFA Marks (as applicable) other than
(to the extent owned by or licensed to the Using Party) as is necessary to
fulfil its obligations hereunder.  The
Using Party undertakes that it shall make no claim to such goodwill and shall
make no use of any of the GECF Marks or the GEFA Marks (as applicable) save as
necessary to fulfil its obligations hereunder.


 


10.1.6              Without prejudice to
clause 10.1.5, if any goodwill or proprietary right in relation to any of
the GECF Marks or the GEFA Marks (as applicable) vests in the Using Party, the
Using Party shall, immediately upon becoming aware of the vesting of such
goodwill or right, assign, or procure the assignment of, such goodwill or right
to the owner of such mark.


 


10.1.7              The Using Party shall within a
reasonable time notify the other party (such notification to be accompanied by
all relevant information which is in its possession) if at any time during the  term of this agreement the Using Party is
aware that any passing-off, infringement or act of unfair competition in
relation to, or challenge to the validity of or proceedings for rectification
in respect of, any of the GECF Marks or GEFA Marks (as applicable) is
occurring, threatened or likely.  The
Using Party shall not have any right to take proceedings in respect of any
infringement of the GECF Marks or GEFA Marks (as applicable) and neither shall
the owner of any of the relevant marks be obliged to bring such proceedings.


 


28

















 


10.2                        Ownership of Intellectual Property
Rights


 


10.2.1              GEFA acknowledges and shall procure
that the GEFA Companies acknowledge that intellectual property rights arising
in materials created by a GEFA Company specifically for a GECF Group Company in
connection with the provision of the Payment Protection Products pursuant to
this agreement shall vest in the relevant GECF Group Company. GEFA shall assign
and shall procure that the GEFA Companies shall assign all rights in and to
such intellectual property rights to the relevant GECF Group Company.


 


10.2.2              On the relevant GECF Group
Company’s request, GEFA shall and shall procure that the GEFA Companies shall
execute any formal assignment or document required to give effect to
Clause 10.2.1 and shall provide all reasonable assistance required by the
relevant GECF Group Company to perfect, protect, defend or assert its interests
in such intellectual property rights.


 


10.3                        Ownership of Data


 


10.3.1              Save where expressly agreed
otherwise in this agreement, all intellectual property rights (including
database rights) and any other rights of whatever nature in the personal data
and proprietary information of GEFA or any member of the GEFA Group (whether or
not personal data as defined in the applicable data protection legislation in
each Territory) disclosed by GEFA or any member of the GEFA Group to GECC or
any member of the GECF Group under or in relation to this agreement shall
remain at all times the property of GEFA or the relevant member of the GEFA
Group.


 


10.3.2              Save where expressly otherwise
agreed, all intellectual property rights (including database rights) and any
other rights of whatever nature in the personal data and proprietary information
of GECC  or any member of the GECF Group
(whether or not personal data as defined in the applicable data protection
legislation in each Territory) disclosed by GECC or any member of the GECC
Group to GEFA or any member of the GEFA Group under or in relation to this
agreement shall remain at all times the property of GECC or the relevant member
of the GECF Group.


 


10.3.3              During the Term and following
termination or expiry of this agreement, GEFA undertakes and shall procure that
the GEFA Companies undertake not to use data or information supplied by a GECF
Group Company or received under the terms of this agreement or a Local
Agreement other than for the purposes of performing their obligations under
this agreement or the relevant Local Agreement (as the case may be) and for
risk modelling and profiling purposes. GEFA shall not, and shall procure that
the GEFA Companies shall not, use any data or information supplied by a GECF
Group Company or received under the terms of this agreement or a Local Agreement:


 


29

















 


(a)                                  for marketing purposes including,
without limitation, producing marketing information containing information
concerning GECF Group Company clients (even if anonymised); or


 


(b)                                 for the purposes of directly or
indirectly canvassing or soliciting the custom of any customer of the GECF
Group.


 


11                                  Data Protection


 


11.1                        For the purposes of this
clause 11, where terms and expressions used are not defined in this
agreement they shall have the meaning assigned to them in the Data Protection
Act 1998.


 


11.2                        GEFA shall, and shall procure that
the GEFA Companies shall and GECC and the GECF Group Companies shall, in
performing their obligations under this agreement, comply in all respects with
the Data Protection Legislation and otherwise in accordance with this
clause 11.


 


11.3                        Where either a GEFA Company or a
GECF Group Company Processes Personal Data under this agreement GEFA or GECF,
as appropriate, shall procure that the relevant GEFA Company or GECF Group
Company shall:


 


(i)                                     take appropriate technical and
organisational measures against the unauthorised or unlawful processing of the
Personal Data and against actual loss or destruction of, or damage to, the
Personal Data, having regard to the state of technological development and the
cost of implementing any measures, the measures must ensure a level of security
appropriate to the harm that might result from unauthorised or unlawful
processing or accidental loss, destruction or damage and the nature of the
Personal Data;


 


(ii)                                  process the Personal Data only in
accordance with this agreement, the relevant GECF Group Company’s or GEFA
Company’s instructions and having regard to the provisions of the Data
Protection Legislation, or as is required by law or any relevant regulatory
body in each Territory;


 


(iii)                               notify the relevant GECF Group
Company or GEFA Company if it breaches its obligations under the Data
Protection Legislation in connection with this agreement or a Local Agreement
and such breach is investigated by the data protection regulator in the
relevant Territory; and


 


(iv)                              refrain from disclosing the
Personal Data in respect of individuals with the EEA to any third party or
transferring the Personal Data obtained or processed within the EEA, outside
the EEA (other than to such jurisdiction as GECF or GEFA may agree, such
agreement not to be unreasonably withheld or delayed, or as otherwise required
by Applicable Law) except in accordance with the written instructions of the
relevant GECF Group Company or GEFA Company.


 


30

















 


11.4                        The relevant GEFA Company or GECF
Group Company may disclose the Personal Data to those of its employees and
others (including contractors) as it reasonably considers necessary for the
performance of its obligations under this agreement. The relevant GEFA Company
or GECF Group Company shall take reasonable steps to ensure the reliability of
employees who have access to the Personal Data and ensure that such employees
and contractors are aware of the relevant GEFA Company’s or GECF Group
Company’s obligations under this agreement and the Data Protection Legislation.


 


12                                  Gross Written Premiums and Collection


 


12.1                        Existing Business


 


The Parties agree that the determination of and
collection of Gross Written Premiums in respect of the Policies sold in the
Existing Business shall continue in accordance with the terms of the relevant
Existing Local Agreement.


 


12.2                        New Business


 


The Parties agree that, in respect of
Identified New Business and New Business, the relevant GECF Group Companies
shall, and GEFA shall procure that the relevant GEFA Companies shall, agree and
incorporate terms in the relevant New Local Agreement for the determination and
collection of Gross Written Premiums in respect of the Policies sold in the New
Business. Such terms shall include a provision to the effect that, where the
GECF Group Company collects Gross Written Premiums, it shall collect from the
Insured Customers the Tax/levy element thereof.


 


13                                  Cancellations and Cancellation Fees


 


13.1                        The Party responsible for
calculating and making refunds to Insured Customers in respect of each sales
channel shall be specified in the Local Agreements.


 


13.2                        The relevant GECF Group Companies
shall, and GEFA shall procure that the relevant GEFA Companies shall, have good
faith discussions to agree a cancellation fee (other than any cancellation fees
due in the event of re-financing) to be charged to Insured Customers in the
event of a cancellation of their Policy by the Insured Customer (provided
cancellation fees are not prohibited by the Applicable Laws of the relevant
Territory) in order to reflect the increased administration charges incurred by
both the relevant GECF Group Company and the relevant GEFA Company and the
cancellation terms on which they will share such cancellation fee (subject to
local Applicable Laws).


 


14                                  Default Interest


 


If any Party fails to pay any amount payable
by it under this agreement, the other shall be entitled to interest on the
overdue amount, payable forthwith upon demand from the due date until the date
of actual payment, both before and after judgment, at the rate of 2 per cent.
per annum above the base rate from time to time of Barclays Bank plc. Such
interest shall accrue on a daily basis and shall be compounded quarterly. All
sums payable under this agreement shall be paid in Euros.


 


31

















 


15                                  Relationship Managers, and Informal
Dispute Resolution and Arbitration


 


15.1                        GEFA on the one hand and GECC on
the other shall each appoint a representative (the “Relationship Managers”) who shall be primarily responsible for
the day to day co-ordination and management of this agreement and the Business
relationship between the Parties.  Each
Party shall notify the other in writing of the identity of its Relationship
Manager. The Relationship Managers may delegate any and all of their
responsibilities to appropriate representatives. Each Party shall procure that
its Relationship Manager and/or representative shall devote sufficient time and
attention to his or her duties and responsibilities and shall be available to
the other at all reasonable times.


 


15.2                        It is the intention of the Parties
that any Dispute (as defined below), shall be settled amicably between the
Parties as quickly as possible and accordingly:


 


15.2.1              where a Dispute arises in relation
to a Local Agreement, the relevant GECF Group Company shall, and GEFA shall
procure that the relevant GEFA Company shall, first refer such Dispute to the
respective representatives of the relevant GECF Group Company and the relevant
GEFA Company.  If such Dispute cannot be
settled amicably within 5 Business Days, it shall be referred to the
Relationship Managers of GECC and GEFA; and


 


15.2.2              where a Dispute arises in relation
to this agreement which cannot be settled amicably within 3 Business Days, such
Dispute shall first be referred to the respective Relationship Managers of the
Parties or such other appropriate persons as the Relationships Managers shall
nominate.


 


If the Relationship Managers (or their
nominees) are unable to resolve a Dispute within 5 Business Days after such
referral, the Dispute shall be referred (upon the application of either Party
or its Relationship Manager) for resolution to the respective Managing Director
or Chief Executive Officer (or the person of equivalent seniority) of each of
the Parties.


 


15.3                        For the purposes of this
clause 15, “Dispute” means a difference or dispute of whatever nature
between the Parties (or the parties to a Local Agreement) arising under, out of
or in connection with this agreement or a Local Agreement (including any
question of interpretation of this agreement or a Local Agreement).


 


15.4                        Save as otherwise provided in this
agreement, any Dispute which is not resolved pursuant to Clause 15.2
within 5 Business Days of referral to the Parties’ respective Managing
Directors or Chief Executives (or such other period as is specified in this
agreement) shall be resolved by arbitration in London conducted in the English
language by a single arbitrator pursuant to the rules of the London Court of
International Arbitration (“LCIA”). The appointing authority shall be the LCIA.
For the avoidance of doubt, the terms of the Arbitration Act 1996 shall apply
to such arbitration and neither Party shall be prevented from exercising any
rights available to the Parties under the Arbitration Act 1996 including,
without limitation, the right to apply for injunctive relief.


 


32

















 


16                                  Performance Meetings And Report Outs


 


16.1                        Framework Agreement Performance
Meetings


 


The Parties shall hold performance meetings
in accordance with the terms of Part A of Schedule 6 and each Party shall
ensure that the meetings are attended by its appropriate relevant personnel, to
include the Relationship Managers and/or their representatives, and appropriate
members of their respective finance, risk and operations teams.


 


16.2                        Local performance meetings


 


The relevant GECF Group Companies shall, and
GEFA shall procure that the relevant GEFA Companies shall, hold performance
meetings in accordance with Part B of Schedule 6.


 


17                                  Accounts, Records and Access to Information


 


17.1                        The Parties will keep, and shall
procure that the GECF Group Companies and the GEFA Companies (as the case may
be) will keep, true and accurate accounts and records in connection with this
agreement, such accounts and records to comply with all Applicable Laws
including any applicable requirements of the relevant Financial Services
Regulator or any other applicable regulator.


 


17.2                        Subject to Applicable Laws and the
confidentiality provisions of Clause 23, the Parties shall and shall
procure that the GEFA Companies, in the case of GEFA, and the GECF Group
Companies, in the case of GECF, shall permit (but not more often than twice in
any Contract Year in a Territory unless required by the relevant Governmental
Authority) authorised representatives, officers or employees of the other (at
the cost of the requesting party) at all reasonable times on ten Business Days
notice to carry out an audit of the GECF Group Company’s obligations in
relation to Profit Share [or any regulatory requirements or dependencies on the
relevant GECF Group Company] under any Local Agreements, or any provision of
services by GEFA or a GEFA Company, or GEFA’s or a GEFA Company’s pricing
methodology for Schemes and claims reserving policy, including when relevant
those accounts and records and any papers which can legally be disclosed
relating in whole or in part to the subject matter of this agreement or any
Local Agreement.


 


17.3                        Without prejudice to any other
right of either Party under this agreement and subject to Applicable Laws and
the confidentiality provisions of clause 23, if any material complaint, claim
or allegation is made (whether to or by any regulatory authority or by any
Insured Customer or to any ombudsman or otherwise) or any proceedings (whether
civil, criminal, investigative or administrative) shall be instituted against a
Party or, any GEFA Company or any GECF Group Company (the “Affected Party”) or
any of their agents or sub-contractors which in any way relates to any Payment
Protection Product comprising the Business or the marketing, sale,
administration and fulfilment thereof or to any Insured Customer or prospective
Insured Customer (or if a Party reasonably believes that any such claim or
allegation may be made or such proceedings instituted), the other Party shall
promptly make available (on the written request of the Affected 


 


33

















 


Party or its legal advisers), and procure
that any relevant GEFA Company or GECF Group Company (as the case may be) shall
promptly make available, such documentation, information, files and papers and
copies thereof as shall be in the possession of the other Party, GEFA Company
or GECF Group Company (as the case may be) or any of its agents or
sub-contractors which may relate in any way to the subject matter of such
complaint, claim, allegation or proceedings and which it is not prevented from
disclosing by virtue of any Applicable Law or any obligation of
confidentiality.


 


18                                  Assignment, Agents and Sub-Contracting


 


18.1                        GECC shall not be entitled to and
shall not, in each case without the prior written consent of GEFA (such consent
not to be unreasonably withheld or delayed), assign, novate or otherwise
transfer this agreement in whole or in part.


 


18.2                        GEFA may at any time assign all or
any part of the benefit of, or its rights or benefits under, this agreement to
a purchaser of all or a substantial part of the business of the GEFA Group but
shall otherwise not be entitled to and shall not, in each case without the
prior written consent of GECC (such consent not to be unreasonably withheld or
delayed), assign, novate or otherwise transfer this agreement in whole or in
part.


 


18.3                        Notwithstanding clauses 18.1 and
18.2 above, both Parties shall be entitled to assign, novate or otherwise
transfer this agreement in whole or in part without the consent of the other Party
to another Group company in the context of a solvent restructuring.


 


18.4                        Notwithstanding anything contained
in this Clause 18, GEFA shall not assign all or any part of the benefit
of, or its rights or benefits under, this agreement without the written consent
of GECC to all or any of Citibank, HSBC, Cetelem or any other entity engaged in
a multinational consumer lending business which is a competitor of the GECF
Group.


 


18.5                        In respect of Existing Business,
Substitute Business, Identified New Business and New Business in an Existing
Territory:


 


(i)                                     GEFA and the GEFA Companies shall
have the right to sub-contract any of their rights or obligations under this
agreement or the relevant Local Agreement to an Approved Subcontractor; and


 


(ii)                                  if GEFA or any of the GEFA
Companies wishes to sub-contract any of its rights or obligations under this
agreement or the relevant Local Agreement to a third party which does not fall
within paragraph (i) above, GEFA shall seek the prior written consent of GECC
(such consent not to be unreasonably withheld or delayed).


 


18.6                        In respect of New Business in a New
Territory GEFA and the GEFA Companies shall not, without GECC’s prior written
consent (such consent not to be unreasonably withheld or delayed), sub-contract
any of their rights or obligations under this agreement other than to an
Approved Subcontractor.


 


34

















 


18.7                        For the purposes of this agreement,
any act or omission or failure to carry out any obligation under this agreement
of any third party or GECF Group Company or GEFA Company (as the case may be)
to whom a Party to this agreement has sub-contracted or otherwise delegated its
obligations shall be deemed to be an act or omission or failure of the Party
which appointed that third party or delegated to such Group company. The
appointing Party shall not be relieved from its liability for any failure by
that Party or any of its appointees to perform any obligation which it
sub-contracts or otherwise delegates to any third party or Group company and
shall remain liable for such failures, acts or omissions.


 


18.8                        Without prejudice to
clause 18.5, each Party shall act prudently in relation to the outsourcing
of any functions under or relating to this agreement and shall comply with any
Financial Services Regulator’s provisions or any Territory-specific provisions
relating to the outsourcing of any functions, duties or responsibilities under
or in connection with this agreement.


 


19                                  Warranty of Authority


 


Each Party warrants to the other that it has
full authority and power to execute this agreement and to perform all of its
duties and obligations under this agreement and any document to be executed
pursuant hereto. Each Party shall provide evidence of such authority if and when
required by the other.


 


20                                  Commencement, Term and Termination


 


20.1                        Commencement and Term


 


20.1.1              This agreement shall commence on
the Commencement Date and, subject to clauses 20.2 and 20.3, shall continue in
force until 31 December 2008.


 


20.1.2              Any terms for extension of this
agreement shall be agreed on or by 30 June 2008 failing which this
agreement shall expire on 31 December 2008.


 


20.2                        Termination Rights of GECC


 


20.2.1              GECC may terminate this agreement
at any time by written notice to GEFA if:


 


(a)                                  GEFA becomes Insolvent;


 


(b)                                 GEFA commits an irremediable
material breach of this agreement;


 


(c)                                  GEFA commits a material breach of
this agreement and fails to remedy such breach within 30 days of being required
to do so by written notice given by GECC;


 


(d)                                 subject to Clause 20.2.2, GEFA
commits a series of persistent breaches which when taken together constitute a
material breach of this agreement;


 


35

















 


(e)                                  the number of Local Agreements
which have been terminated pursuant to clause 20.4 or its equivalent in
the Local Agreement represents 50 per cent. or more of the total number of
Local Agreements in existence from time to time;


 


(f)                                    Genworth Financial, Inc. ceases to
have a financial strength rating of BBB or better according to Standard &
Poor’s;


 


(g)                                 a Material Change has occurred and
paragraph 12 of the procedure set out in Part C of Schedule 5 applies
(such procedure having been initiated pursuant to Clause 20.2.3);


 


(h)                                 50 per cent. or more of the maximum
available Service Credits in a month have been accumulated for each of nine
months or more in any Relevant Period;


 


(i)                                     any one of Citibank, HSBC, Cetelem
or any other entity engaged in a multi-national consumer lending business which
is a competitor of the GECF Group has acquired Control of GEFA or any holding
company of GEFA,


 


such notice shall set out the length of any
required Exit Phase and the date the termination takes effect.


 


20.2.2              GECC shall not provide a notice to
terminate pursuant to Clause 20.2.1(d) without first referring the matter
to the dispute resolution procedure referred to in Clause 15.  If the dispute resolution procedure: (i)
does not lead to the parties agreeing a remediation plan in respect of the
breaches then GECF may terminate this agreement in accordance with
Clause 20.2.1(d) or (ii) produces an agreed resolution plan but GEFA fails
to comply with such plan, then the persistent breaches shall be deemed to be a
material breach and GECC may terminate this agreement in accordance with
Clause 20.2.1(c).


 


20.2.3              If in any Relevant Period Eligible
GWP is in excess of 20 per cent. lower than Comparable GWP in two or more
Territories (a “Material Change”),
GECC shall, have the right, by notice in writing to GEFA, within 10 Business
Days of the occurrence of such Material Change, to initiate the procedure set
out in Part C of Schedule 5. For the avoidance of doubt, if a Material
Change results or may be reasonably said to result from a general reduction in
the amount of financing or other activity or a reduction due to any specific
management decision of GECC or a GECF Group Company which results in a
reduction in production in the relevant Territories, then the procedure in Part
C of Schedule 5 shall not be initiated and a Material Change shall be
deemed not to have occurred.


 


20.3                        Termination Rights of GEFA


 


GEFA may terminate this agreement at any time
by written notice to GECC if GECC becomes Insolvent.


 


36

















 


20.4                        Termination Rights under Local
Agreements


 


20.4.1              The Parties agree that the relevant
GECF Group Companies shall, and GEFA shall procure that the relevant GEFA
Companies shall, in respect of Existing Business, amend the terms of their
Existing Local Agreements, or in respect of Identified New Business and New
Business, enter into New Local Agreements, which grant the relevant GECF Group
Company and the relevant GEFA Company as applicable the right to terminate such
Local Agreement by written notice to the relevant counterparty if (and only
if):


 


(i)                                     the relevant GECF Group Company or
GEFA Company is Insolvent;


 


(ii)                                  the relevant GEFA Company commits
an irremediable material breach of the Local Agreement;


 


(iii)                               the relevant GEFA Company commits a
material breach of the Local Agreement and fails to remedy such breach within
30 days of being required to do so by written notice given by GECC;


 


(iv)                              subject to Clause 20.4.3, the
relevant GEFA Company commits a series of persistent breaches which when taken
together constitute a material breach of the Local Agreement;


 


(v)                                 a Local Material Change has
occurred and paragraph 12 of the procedure set out in part C of Schedule 5
applies (such procedure having been initiated pursuant to Clause 20.4.4);


 


(vi)                              subject to 20.4.2 if, in respect of
the relevant Local Agreement, GEFA accumulates at least 27.5 per cent. of the
maximum available Service Credits in any four consecutive months or for any
nine months in a Relevant Period provided that if such period ends after 31
December 2005 the reference to 27.5 per cent. above shall be replaced by a
reference to 25 per cent. ; or


 


(vii)                           a Regulatory Event has occurred and
sub-paragraph (ix) of the procedure set out in clause 20.4.5 applies,


 


such notice shall set out the length of any
required Exit Phase and the date the termination takes effect.


 


20.4.2              GECC shall not exercise its right
to terminate any Local Agreement pursuant to Clause 20.4.1(vi) at any time
(i) within 12 calendar months from the Commencement Date and (ii) in respect of
a New Local Agreement within 6 calendar months from the commencement date of
the relevant Local Agreement.


 


20.4.3              GECC shall not provide a notice to
terminate pursuant to Clause 20.4.1(iv) without first referring the matter
to the dispute resolution procedure referred to in Clause 15.  If the dispute resolution procedure: (i)
does not lead to the Parties 


 


37

















 


agreeing a remediation plan in respect of the
breaches then GECC may terminate this agreement pursuant to Clause 20.4.1(iv)
or (ii) produces an agreed resolution plan but GEFA fails to comply with such
plan, then the breach(es) shall be deemed to be material and GECC may terminate
the Local Agreement in accordance with Clause 20.4.1(iii).


 


20.4.4              If in any Relevant Period, Local
Eligible GWP is in excess of 50 per cent. lower than Local Comparable GWP (a “Local Material Change”) GECC shall within
10 Business Days of the occurrence of such Local Material Change have the
right, by notice in writing to GEFA, to initiate the procedure set out in Part
C of Schedule 5 with respect to the Local Agreement in question, provided
that in respect of each Local Agreement in a Key Territory the figure of 50 per
cent. above shall be replaced with 20 per cent. For the avoidance of doubt, if
a Local Material Change results or may be reasonably said to result from a
general reduction in the amount of financing activity or a reduction due to any
specific management decision of GECF Group Companies which results in a
reduction in production in the relevant Territory, then the procedure in Part C
of Schedule 5 shall not be initiated and a Local Material Change shall be
deemed not to have occurred.


 


20.4.5              The Parties agree that following
the occurrence of a Regulatory Event, the following shall apply.


 


(i)                                     Within 5 Business Days of the
occurrence of a Regulatory Event, the Affected GEFA Company shall give notice
in writing of the Regulatory Event to each counterparty of each Local Agreement
to which it is a party.  Such notice
shall include:


 


(a)                                  details of the matter which gave
rise to the Regulatory Event;


 


(b)                                 details of any remedial action
stipulated by the Financial Services Regulator which may be taken in order to
avoid the threatened revocation or suspension of authorisation; and


 


(c)                                  details of any deadlines by which
such action must be taken.


 


(ii)                                  Upon receipt of the notice referred
to in clause (i) above the relevant GECF Group Company may begin
contingency planning to change to a Replacement Supplier in respect of those
Payment Protection Products which the Affected GEFA Company will be unable to
provide in the event that its authorisation is revoked or suspended.  Such contingency planning may include
contacting potential replacement suppliers for the purposes of agreeing terms
of supply but, for the avoidance of doubt, any such agreement shall be
conditional on the revocation or suspension of the Affected GEFA Company’s
authorisation.


 


(iii)                               Within 15 Business Days of the
occurrence of the Regulatory Event, the Affected GEFA Company shall produce and
provide to the relevant GECF 


 


38

















 


Group Company a proposal updated from time to
time as appropriate setting out the action which the Affected GEFA Company
intends to take in order to comply with the terms of the notice from the
Financial Services Regulator and the timetable within which such action shall
be taken.


 


(iv)                              Promptly after the provision of the
proposal pursuant to clause (iii) above, the Affected GEFA Company and the
relevant GECF Group Company shall discuss the adequacy of the proposed action
and timetable.


 


(v)                                 If the Affected GEFA Company and
the relevant GECF Group Company, each acting reasonably, agree that the steps
set out in the proposal will be sufficient to resolve the problem, the Affected
Company shall implement the proposal in accordance with the agreed
timetable.  The Affected GEFA Company
shall keep the relevant GECF Group Company regularly informed as to progress
and shall promptly inform the relevant GECF Group Company of any further
relevant communications from the Financial Services Regulator.


 


(vi)                              If the relevant GECF Group Company,
acting reasonably, considers that the proposal will not adequately address the
problem identified by the Financial Services Regulator, the parties shall
negotiate in good faith to make such amendments as they agree are necessary to
resolve the problem.


 


(vii)                           If at any time the Affected GEFA
Company, in its reasonable opinion, considers that it will be unable to take
the necessary action to avoid the revocation or suspension of its
authorisation, it shall immediately inform the relevant GECF Group Company and
the provisions of clause (ix) shall apply.


 


(viii)                        If at any time the Financial
Services Regulator notifies the Affected GEFA Company that is authorisation has
been revoked or suspended, the provisions of clause (ix) shall apply.


 


(ix)                                In the event that this
clause (ix) applies, the relevant GECF Group Company shall have the right
to terminate the relevant Local Agreement to the extent that it relates to
Payment Protection Products in respect of which the Affected GEFA Company is or
shall be unable to meet its obligations and shall have the right to enter
arrangements for the supply of such Payment Protection Products with a
Replacement Supplier.


 


21                                  Consequences of Termination


 


21.1                        Termination of this Agreement


 


21.1.1              Upon the termination or expiration
of this agreement pursuant to clauses 20.1, 20.2 or 20.3 the Local Agreements
shall automatically terminate.


 


39

















 


21.1.2              GECC and each GECF Group Company
shall not during the Term or during the Run-Off Period, by way of any act or
omission, encourage, induce or persuade any Insured Customer to terminate any
Payment Protection Product which such Insured Customer has entered into with
GEFA or a GEFA Company.


 


21.2                        Surviving Clauses


 


21.2.1              Termination or expiry of this
agreement for whatever reason shall be without prejudice to the rights,
obligations and liabilities of either Party then accrued due and shall not
affect the coming into force or the continuation in force of this
clause 21.2.1 or of any provision of this agreement which is expressly
stated to continue in force at or after termination or expiry including , 10.3,
11, 15, 17, 21.3, 23, 30 and 31.


 


21.2.2              During the Run-Off Period the
following additional clauses shall remain in force: 5.3, 6, 9.1, 9.2, 12, 13,
14, 16, 18.


 


21.3                        Exit Plan and Termination
Assistance


 


21.3.1              If GECC so requests promptly
following the commencement of an Exit Phase, GEFA shall and shall procure that
the GEFA Companies shall as soon as reasonably practicable submit to GECC and
the relevant GECF Companies a plan (the “Exit
Plan”) which shall describe the activities and tasks to be performed
by the Parties in order to facilitate the smooth transfer of the responsibility
for the provision of Payment Protection Products to a Replacement Supplier.


 


21.3.2              During the Exit Phase, the Parties
shall perform their respective obligations as stated in the Exit Plan.


 


21.3.3              Subject to the provisions of the
Exit Plan, each Party shall and shall procure that the GEFA Companies or the
GECF Group Companies (as applicable) shall during the Exit Phase provide to the
other Party any assistance reasonably requested to allow the provision of
Payment Protection Products to continue without material interruption or
material adverse effect and to facilitate the transfer of, responsibility for
and conduct of the provision of Payment Protection Products to a Replacement Supplier
in accordance with the provisions of the Exit Plan.  GEFA shall be responsible for any reasonable additional costs
incurred by GEFA as a result of the provision of termination assistance
services to GECC or GECF Group Companies.


 


21.3.4              Except as otherwise stated in the
Exit Plan, the obligations stated in Clauses 21.3.2 and 21.3.3 above shall be
in addition to and not in substitution for the provision of the Payment
Protection Products during the Exit Phase on the terms and conditions of this
agreement.


 


40

















 


22                                  Force Majeure


 


22.1                        “Event of Force Majeure” means, in
relation to any Party or a GECF Group Company or a GEFA Company (as the case
may be), an event or circumstance beyond the reasonable control of that person
(the “Claiming Party”) including, without limitation, strikes, lock-outs and
other industrial disputes (in each case, whether or not relating to the
Claiming Party’s workforce) but excluding any event under clause 4.


 


22.2                        The Claiming Party shall not be
deemed to be in breach of this agreement or otherwise liable to any other party
(the “Non-claiming Party”) for any delay in performance or any non-performance
of any obligations under or pursuant to this agreement (and the time for performance
shall be extended accordingly) if and to the extent that the delay or
non-performance is due to an Event of Force Majeure provided that:


 


(i)                                     the Claiming Party could not have
avoided the effect of the Event of Force Majeure by taking precautions, including
disaster recovery arrangements, which, having regard to all matters known to it
before the occurrence of the Event of Force Majeure and all relevant factors,
it ought reasonably to have taken but did not take; and


 


(ii)                                  the Claiming Party has used reasonable
endeavours to mitigate the effect of the Event of Force Majeure and to carry
out its obligations under this agreement in any other way that is reasonably
practicable.


 


22.3                        The Claiming Party shall promptly
notify the Non-claiming Party of the nature and extent of the circumstances
giving rise to the Event of Force Majeure.


 


22.4                        If the Event of Force Majeure in
question prevails for a continuous period in excess of two months after the
date on which it began, the Non-claiming Party may require that the issue be
included on the agenda of the next local performance meeting held pursuant to
clause 16.2.  At such meeting the
Parties shall discuss in good faith the continued provision of the affected
service or obligation and any necessary amendments to this agreement or the
relevant Local Agreement.


 


23                                  Confidential Information


 


23.1                        Each Party undertakes to each other
and each member of the other party’s Group that it will not, and will ensure
that its directors, officers, employees and agents do not, without the prior
written consent of the other Party:


 


23.1.1              make available or disclose any
Confidential Information of the other party which is provided to it by that
other Party pursuant to this agreement to any person other than those of its
directors, officers or employees or other persons (including subcontractors)
who are necessarily required in the course of their duties to receive and
consider the same for the purposes of performing its obligations or exercising
its rights under this agreement and for risk modelling and profiling purposes,
but not for marketing purposes or for the purposes of directly or indirectly
canvassing or soliciting the custom of any customer of the GECF Group


 


41

















 


(including for the avoidance of doubt using
anonymised information on clients of GECF Group Companies) (the “Permitted Purposes”); or


 


23.1.2              use any Confidential Information of
that other Party which is provided to it by the other Party pursuant to this
agreement other than for the Permitted Purposes.


 


23.2                        The provisions of clause 23.1
shall not apply to the extent that any Confidential Information:


 


23.2.1              is at the date of this agreement or
any time thereafter becomes publicly known, other than as a result of any breach
of this agreement or any other duty of confidence;


 


23.2.2              can be shown by the receiving Party
to the disclosing Party’s reasonable satisfaction to have been known by the
receiving Party before disclosure by the disclosing Party, other than as a result
of any breach of this agreement or any other duty of confidence;


 


23.2.3              is required to be disclosed by any
court or governmental, administrative or regulatory authority competent to
require such disclosure; or


 


23.2.4              is required to be disclosed by any
Applicable Law.


 


23.3                        Notwithstanding
clause 23.1:


 


23.3.1              a Party may disclose Confidential
Information relating to another to its professional advisers for the purposes
of obtaining professional advice provided that the disclosing Party shall
advise any such person to whom such information is disclosed of the
confidentiality obligations contained in this agreement and shall procure that
such person complies with such obligations as if it were a party to this
agreement; and


 


23.3.2              no Party shall be prevented from
using or disclosing any information which is independently developed without
reference to or which does not refer to any Confidential Information of the
other Party.


 


23.4                        Each Party shall, forthwith upon
termination or expiry of this agreement for any reason or upon the receipt by
it of written demand from the other, return all written Confidential
Information provided to it by the other Party.


 


24                                  Waiver


 


24.1                        A waiver of any term, provision or
condition of this agreement shall be effective only if given in writing and
signed by the waiving Party and then only in the instance and for the purpose
for which it is given.


 


24.2                        No failure or delay on the part of
any Party in exercising any right, power or privilege under this agreement
shall operate as a waiver thereof, nor shall any single or partial 


 


42

















 


exercise of any such right, power or
privilege preclude any other or further exercise thereof or the exercise of any
other right, power or privilege.


 


24.3                        No breach of any provision of this
agreement shall be waived or discharged except with the express written consent
of the Parties.


 


25                                  Entire Agreement


 


25.1                        This agreement constitutes the
entire and only agreement between the Parties relating to the subject matter of
this agreement and (to the extent permissible by law) supersedes and
extinguishes any and all prior drafts, agreements, writings, negotiations,
understandings, undertakings, representations, warranties and arrangements of
any nature whatsoever, whether or not in writing, relating to or in connection
with the subject matter of this agreement provided that neither Party is
attempting to exclude any liability for fraudulent statements (including
fraudulent pre-contractual misrepresentations) on which the other Party can be
shown to have relied. All terms, conditions and warranties not stated expressly
in this agreement, and which would in the absence of this provision be implied
into this agreement by statute, common law, equity, trade, custom or usage or
otherwise, are excluded to the maximum extent permitted by law.


 


25.2                        Each Party acknowledges that it has
not been induced to enter into this agreement in reliance upon, nor has it been
given, any warranty, representation, statement, assurance, covenant, agreement,
undertaking, indemnity or commitment of any nature whatsoever other than as
expressly set out in this agreement and, to the extent it has been, it
unconditionally and irrevocably waives any claims, rights and remedies which it
might otherwise have had in relation thereto.


 


25.3                        The provisions of this
clause shall not exclude any liability which a Party would otherwise have
to the other or any right which either of them may have to rescind this
agreement in respect of any statements made fraudulently by the other prior to
the execution of this agreement or any rights which either of them may have in
respect of fraudulent concealment by the other.


 


25.4                        This agreement may be varied only
by a document signed by both Parties.


 


25.5                        Any claim brought by either Party
in respect of a breach by the other Party of the terms of this agreement may
include a claim for actual or potential loss of profits.


 


26                                  Costs and Expenses


 


26.1                        Except as expressly provided in
this agreement each of the Parties shall bear its own legal, accountancy and
other costs, charges and expenses connected with the negotiation, preparation
and implementation of this agreement and any other agreement incidental to or
referred to in this agreement.


 


26.2                        Except as expressly provided in
this agreement, GECC shall not be entitled to any other remuneration or to be
reimbursed for any cost, charge or expense incurred by it in each case in
connection with this agreement or the performance of its obligations hereunder.



 


43

















 


For the avoidance of doubt, this
clause shall not operate to exclude or limit any liability of GEFA for
breach of contract or its negligence.


 


27                                  No Partnership


 


Nothing in this agreement and no action taken
by the Parties pursuant to this agreement shall constitute, or be deemed to
constitute, a partnership, association, joint venture or other co-operative
entity.


 


28                                  Notices


 


28.1                        Any notice, demand or other
communication given or made under or in connection with the matters
contemplated by this agreement shall be in writing and shall be delivered
personally or sent by fax or prepaid first class post (air mail if posted to or
from a place outside the United Kingdom):


 


In the case of GEFA to:


 


Address: Vantage West, Great West Road,
Brentford, Middlesex TW8 9AG

Fax: 44 20 8380 3300

Attention: European Legal Director


 


In the case of GECC to:


 


GE Consumer Finance, Malvern House, Croxley
Green Business Park, Watford, Herts, WD18 8YF


 


Fax: 44 1923 
426871


 


Attention: General Counsel, Europe


 


and shall be deemed to have been duly given
or made as follows:


 


28.1.1              personally delivered, upon delivery
at the address of the relevant Party;


 


28.1.2              if sent by first class post, two
Business Days after the date of posting;


 


28.1.3              if sent by air mail, five Business
Days after the date of posting; and


 


28.1.4              if sent by fax, when sent provided
that the sender receives a satisfactory transmission confirmations,


 


provided that if, in accordance with the
above provision, any such notice, demand or other communication would otherwise
be deemed to be given or made after 5.00 p.m., such notice, demand or other
communication shall be deemed to be given or made at 9.00 a.m. on the next
Business Day.


 


44

















 


28.2                        A Party may notify the other party
to this agreement of a change to its name, relevant addressee and address for
the purposes of clause 28.1 provided that such notification shall only be
effective on:


 


(i)                                     the date specified in the notification
as the date on which the change is to take place; or


 


(ii)                                  if no date is specified or the date
specified is less than five Business Days after the date on which notice is
given, the date falling five Business Days after notice of any such change has
been given.


 


29                                  Invalidity and Severability


 


29.1                        If any provision of this agreement
is or becomes (whether or not pursuant to any judgement or otherwise) invalid,
illegal or unenforceable in any respect under the law of any jurisdiction:


 


29.1.1              the validity, legality and
enforceability under the law of that jurisdiction of any other provision; and


 


29.1.2              the validity, legality and
enforceability under the law of any other jurisdiction of that or any other
provision,


 


shall not be affected or impaired in any way
thereby.


 


29.2                        If any provision of this agreement
shall be held to be void or declared illegal, invalid or unenforceable for any
reason whatsoever, such provision shall be divisible from this agreement and
shall be deemed to be deleted from this agreement and the validity of the
remaining provisions shall not be affected. In the event that any such deletion
materially affects the interpretation of this agreement then the Parties shall
negotiate in good faith with a view to agreeing a substitute provision which as
closely as possible reflects the commercial intention of the Parties.


 


30                                  Governing Law and Jurisdiction and Appointment of
Process Agent


 


30.1                        Governing Law and Jurisdiction


 


This agreement (and any dispute, controversy,
proceedings or claim of whatever nature arising out of or in any way relating
to this agreement or its formation) shall be governed by and construed in
accordance with English law.


 


30.2                        Appointment of Process Agent


 


30.2.1              GEFA hereby irrevocably appoints
(Marked for the attention of Company Secretary) Financial Insurance Company
Limited, [Vantage West, Great West Road, Brentford, Middlesex TW8 9AG], as its
agent to accept service of process in England in any legal action or
proceedings arising out of this agreement, 


 


45

















 


service upon whom shall be
deemed completed whether or not forwarded to or received by GEFA.


 


30.2.2              GEFA agrees to inform GECC in
writing of any change of address of such process agent within 28 days of such
change.


 


30.2.3              If such process agent ceases to be
able to act as such or to have an address in England, GEFA irrevocably agrees
to appoint a new process agent in England acceptable to GECC and to deliver to
GECC within 14 days a copy of a written acceptance of appointment by the
process agent.


 


30.2.4              GECC hereby irrevocably appoints
(Marked for the attention of General Counsel, Europe) GE Capital Bank, [GE
Consumer Finance, Malvern House, Croxley Green Business Park, Watford, Herts
WD18 8YF], as its agent to accept service of process in England in any legal
action or proceedings arising out of this agreement, service upon whom shall be
deemed completed whether or not forwarded to or received by GECC.


 


30.2.5              GECC agrees to inform GEFA in
writing of any change of address of such process agent within 28 days of such
change.


 


30.2.6              If such process agent ceases to be
able to act as such or to have an address in England, GECC irrevocably agrees
to appoint a new process agent in England acceptable to GEFA and to deliver to
GEFA within 14 days a copy of a written acceptance of appointment by the
process agent.


 


30.2.7              Nothing in this agreement shall
affect the right to serve process in any other manner permitted by law or the
right to bring proceedings in any other jurisdiction for the purposes of the
enforcement or execution of any judgment or other settlement in any other
courts.


 


31                                  Exclusion of Third Party Rights


 


The Parties to this agreement do not intend
that any term of this agreement should be enforceable, by virtue of the
Contracts (Rights of Third Parties) Act 1999, by any person who is not a Party
to this agreement.


 


46

















 


IN WITNESS whereof this agreement has been
executed on the date first above written.


 


	
  Signed by /s/  William C. Goings

  	
  )

  
	
   

  	
   

  
	
  for and on behalf of

  	
  )

  
	
   

  	
   

  
	
  GEFA INTERNATIONAL HOLDINGS, INC.

  	
  )

  
	
   

  	
   

  
	
  in the presence of:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Signed by /s/  George Awad

  	
  )

  
	
   

  	
   

  
	
  for and on behalf of

  	
  )

  
	
   

  	
   

  
	
  GE CAPITAL CORPORATION

  	
  )

  



 


in the presence of:


 


47

















 


Schedule 1

Existing Business


 


Part A – Existing Direct Business


 


	
  Territory

  	
   

  	
  Product

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  
	
  UK
  (GCF)

  	
   

  	
  Bank Card Account Cover
  3

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  UK
  (GCF)

  	
   

  	
  Bank Card Account Cover
  3 over 70’s

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  UK
  (GCF)

  	
   

  	
  Store Card Account Cover
  3

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  UK
  (GCF)

  	
   

  	
  Store Card Account Cover
  3 over 70’s

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  UK
  (GCF)

  	
   

  	
  Monsoon Account Cover 3

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  UK
  (GCF)

  	
   

  	
  Monsoon Account Cover 3
  over 70’s

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  UK
  (GCF)

  	
   

  	
  3335 Comet, B&Q
  Revolving

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  UK
  (GCF)

  	
   

  	
  3334 Comet, B&Q
  fixed

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  UK
  (GCF)

  	
   

  	
  3303 Toys R Us

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  UK
  (GCF)

  	
   

  	
  3358 DFS

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  UK
  (GCF)

  	
   

  	
  3644 Kwik Fit

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  UK
  (GCF)

  	
   

  	
  Store Credit Card Beagle

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  UK
  (GCF)

  	
   

  	
  Matrix

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  Sweden

  	
   

  	
  NA0

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  Sweden

  	
   

  	
  NA1

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  Sweden

  	
   

  	
  RD1

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  Sweden

  	
   

  	
  RD2

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  Sweden

  	
   

  	
  RR1

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  Sweden

  	
   

  	
  GC1-6

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  Sweden

  	
   

  	
  GD9

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  Sweden

  	
   

  	
  RD3

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  Denmark

  	
   

  	
  G36

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  Denmark

  	
   

  	
  G37

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  Denmark

  	
   

  	
  G38

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  Denmark

  	
   

  	
  G39

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  Denmark

  	
   

  	
  G35 Compulsory Life

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  Denmark

  	
   

  	
  G34 Compulsory Life

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  Denmark

  	
   

  	
  G29 Compulsory Life

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  Denmark

  	
   

  	
  G2B Compulsory Life

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  Denmark

  	
   

  	
  G40 Compulsory Life

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  Denmark

  	
   

  	
  G41 Compulsory Life

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  Denmark

  	
   

  	
  G56 Xtra Tryghed

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  Denmark

  	
   

  	
  G57 Xtra Tryghed

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  Denmark

  	
   

  	
  G58 Xtra Tryghed

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  Denmark

  	
   

  	
  G59 Xtra Tryghed

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  Denmark

  	
   

  	
  AC1 AcceptCard

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  Norway

  	
   

  	
  6604

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  Norway

  	
   

  	
  6602

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
   

  	
   

  	
  6612

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  Norway

  	
   

  	
  6701, 6801, 6702, 6802,
  6901, 6902, 6712

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  Norway

  	
   

  	
  6812

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  Norway

  	
   

  	
  6703, 6803, 6903

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  



 


48

















 


	
  Territory

  	
   

  	
  Product

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  
	
  Norway

  	
   

  	
  6603

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  Norway

  	
   

  	
  6613

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  Norway

  	
   

  	
  6913, 6914,6915

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  Norway

  	
   

  	
  6813

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  Norway

  	
   

  	
  6601

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  Norway

  	
   

  	
  6611

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  Norway

  	
   

  	
  6811

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  Norway

  	
   

  	
  6504a,6504b

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  
	
  Switzerland

  	
   

  	
  GC4 ProKredit

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  Switzerland

  	
   

  	
  GC5 Prolimit

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  Switzerland

  	
   

  	
  GC6 Unileasing

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  Switzerland

  	
   

  	
  GC7Sales Finance

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  Italy

  	
   

  	
  GE4 Finanziamento Sereno

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  Italy

  	
   

  	
  GE5 Finanziamento Sereno
  Plus

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  Italy

  	
   

  	
  GE6 Lease & Life

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  Italy

  	
   

  	
  GE7 Lease & Life
  Plus

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  Italy

  	
   

  	
  GEB Resolicitation

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  France

  	
   

  	
  Auto

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  France

  	
   

  	
  Vie 3011

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  France

  	
   

  	
  Vie 0007

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  France

  	
   

  	
  Vie 0011

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  France

  	
   

  	
  Vie 0029

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  France

  	
   

  	
  Vie 0039

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  France

  	
   

  	
  Vie 0052

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  France

  	
   

  	
  Vie 0091

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  France

  	
   

  	
  RD 0022

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  France

  	
   

  	
  RD 0029

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  France

  	
   

  	
  RD 0074

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  France

  	
   

  	
  RD 0116

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  France

  	
   

  	
  RD 0045

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  France

  	
   

  	
  RD 0057

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  France

  	
   

  	
  RD 0075

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  France

  	
   

  	
  RD 0120

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  France

  	
   

  	
  Mortgage

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  France

  	
   

  	
  0001

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  France

  	
   

  	
  0022

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  France

  	
   

  	
  0019

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  France

  	
   

  	
  1995

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  France

  	
   

  	
  0024

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  France

  	
   

  	
  0054

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  France

  	
   

  	
  0055

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  France

  	
   

  	
  0089

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  France

  	
   

  	
  0090

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  France

  	
   

  	
  0030

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  France

  	
   

  	
  3595

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  France

  	
   

  	
  0003

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  



 


49

















 


	
  Territory

  	
   

  	
  Product

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  
	
  France

  	
   

  	
  0087

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  France

  	
   

  	
  0088

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  France

  	
   

  	
  0118

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  France

  	
   

  	
  0119

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  France

  	
   

  	
  0069

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  France

  	
   

  	
  0056

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  France

  	
   

  	
  GE branded

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  France

  	
   

  	
  Co-branded

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  Germany

  	
   

  	
  SG1-2

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  



 


Part B – Existing Reinsured Business


 


	
  Territory

  	
   

  	
  Product

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  
	
  UK
  (Woodchester)

  	
   

  	
  BU, BU2 Cap care Premier
  HP

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  UK
  (Woodchester)

  	
   

  	
  BUR, 2BU Cap care
  Premier PCP

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  UK
  (Woodchester)

  	
   

  	
  CUB, 2CB Custom Finance

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  UK
  (Woodchester)

  	
   

  	
  K1B, K2B Keyman Basic

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  UK
  (Woodchester)

  	
   

  	
  K3B, K4B Keyman Standard

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  UK
  (Woodchester)

  	
   

  	
  K5B, K6B Keyman Premier

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  UK
  (Woodchester)

  	
   

  	
  BA, BA2 Cap Care
  Standard

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  UK
  (Woodchester)

  	
   

  	
  BL, BL2 Cap Care Basic
  HP

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  UK
  (Woodchester)

  	
   

  	
  BLR 2BL Cap care Basic
  PCP

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  UK
  (Woodchester)

  	
   

  	
  BAR, 2BA Cap care
  Standard PCP

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  Ireland

  	
   

  	
  PA – PN, TA –TR Auto
  business

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  Ireland

  	
   

  	
  WB – WY, XB – XY
  Consumer business

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  Ireland

  	
   

  	
  KA – KF Equipment
  business

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  Germany

  	
   

  	
  SPA-B

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  Germany

  	
   

  	
  SPG-J

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  Germany

  	
   

  	
  SPC-F

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  Spain

  	
   

  	
  BF20

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  Spain

  	
   

  	
  BF22

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  Spain

  	
   

  	
  Super PPI

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  Spain

  	
   

  	
  resolicitation

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  Portugal

  	
   

  	
  WAA, WNA, WFA

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  Portugal

  	
   

  	
  WAB – WAM, WNB – WNM,
  WFB - WFM

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  



 


50

















 


Part C


 


 


**


 


51

















 


Schedule 2

GE Financial Insurance Service Level Standards


 


1                                         Glossary


 


Business Day – means, for the purposes of this Schedule 2 only, a day
(other than a Saturday, Sunday or public holiday) on which banks are open for
business in the relevant Territory;


 


Confirmed/Confirmation – New business and cancellation records accepted and made live on
to the GEFA administration system.


 


Decision Accuracy – Accuracy of the decision to pay/reject a claim based on the terms
and conditions of the policy against the detail put forth in the claim. The
measure of the accuracy is Yes or No.


 


Notification of Insurance Processing – Electronic files, or other
medium agreed between the Parties, in agreed format containing new business,
cancellations, mid-term adjustments, premium payments and customer details for
bulk premium, periodic premium, single premium and reinsurance products.
Notification of Insurance Processing also includes correction of errors passed
back to GECC for resolution.


 


Processing Month End – The period within the GEFA Group
for which Insurance Processing is Confirmed. 
This follows a predefined accounting schedule of month ends,
normally occurring on the last or second to last Friday in the calendar month,
which GEFA will notify to GECC annually at the beginning of the year for the
whole year.


 


Pending – Unconfirmed new business and
cancellation records, which suffer validation errors and warning messages.


 


Pending List – A list of Notification of
Insurance Processing that was not confirmed and put live on the GEFA
administration system as at the Processing Month End.


 


Processed – The Notification of Insurance
Processing has been Confirmed or Rejected or is Pending and Pending and
Rejected data have been passed to GECC for correction.


 


Processing Month – The month GEFA has received the
Notification of Insurance Processing from GECC to process.


 


Reconciled/Reconciliation – Notification of Insurance
Processing which is allocated to one of the following categories (and
communicated back to the client within agreed Service Levels) – Confirmed,
Pending and Rejected –and reconciled with cash received.


 


Rejected – New business and cancellation
records which result in a severe error as part of the interface validation
process.


 


52

















 


Selling Month – The month in which GECC sells
the insurance to the customer.


 


2                                         Hours Of Service


 


Hours of service availability will be no less
than 8 hours per day Monday to Friday excluding public holidays. Hours of
service will vary in line with local working practices.


 


3                                         Notification and
Reconciliation of Insurance Processing


 


GEFA will process bulk premium, periodic
premium, single premium and reinsurance premium in respect of which collection
is effected either by GECC or by GEFA.


 


The Service Levels in paragraph 3 are
dependent on paragraph 12 and the dependencies set out in Table A in paragraph
17 below.


 


3.1                               Chart 1 (Operating Reconciliation
Process) outlines the process flow for processing the insurance records
notified. The process includes the processing of all new business records,
cancellation records and the Pending and Rejected records that arise from the
process.


 


Operating Reconciliation Process (Chart 1)


 





 


The Service Levels that apply are:


 


(i)                                     100% of Notifications of Insurance
Processing notified to GEFA shall be Processed by GEFA within 5 Business Days
of file receipt;


 


(ii)                                  Notifications of Insurance
Processing notified by GECC to GEFA at least 5 Business Days prior to the end
of the Processing Month will be Processed by GEFA in the month in which the
notification occurred unless the terms of an Existing Local Agreement provide
otherwise;


 


53

















 


(iii)                               subject to paragraph 3.1(ii),
reasonable efforts will be made to Process Notifications of Insurance
Processing received fewer than 5 Business Days before Processing Month
End,  but for the avoidance of doubt
this is not guaranteed within the terms of the Service Levels;


 


(iv)                              reconciliation between the number
of Notifications of Insurance Processing received by GEFA and the number of
Notifications of Insurance Processing Processed will be completed by the tenth
Business Day following the Processing Month End; and


 


(v)                                 provided that GECC has complied
with its obligations to respond within five Business Days to all Pending Notifications
of Insurance Processing,


 


(a)                                  at the end of a Processing Month,
Notifications of Insurance Processing classified as Pending shall not exceed 1%
of total Notifications of Insurance Processing notified to GEFA in that
Processing Month (excluding Notifications of Insurance Processing notified to
GEFA fewer than 5 Business Days from the end of the relevant Processing Month);
and


 


(b)                                 by the end of the next Processing
Month there shall be no Pending Notifications of Insurance Processing which
were notified to GEFA in the preceding Processing Month (excluding
Notifications of Insurance Processing notified to GEFA fewer than 5 Business
Days from the end of the previous Processing Month).


 


3.2                               Financial Control
Reconciliation Process


 


(i)                                     The financial control
reconciliation process begins when the operating reconciliation process set out
in paragraph 3.1 ends. The Reconciliation can only happen once all the policies
have been Processed. The procedure for invoicing and settlement shall be as
follows:


 


(a)                                  Premium Invoiced - GEFA shall supply to GECC invoice
and Pending List 10 Business Days after Processing Month End.


 


(b)                                 Premium & Cash
- GEFA shall
supply to GECC statement, commission settlement (where applicable) and Pending
List 10 Business Days after Processing Month End.


 


(c)                                  Cancellations - GEFA shall supply to GECC credit
note or cheque 10 Business Days after Processing Month End (if cancellation
amount owed exceeds premium in the relevant Processing Month).


 


(d)                                 Payment of
Invoices/Statements -
Each party shall make payment within 7 Business Days of the issue of an invoice
in respect of premium by the other Party unless the terms of an Existing Local
Agreement provide otherwise.


 


54

















 


(ii)                                  The Service Level for Financial
Control Reconciliation is: 100% of all Notifications of Insurance Processing to
be Reconciled by GEFA each month by the 10th Business Day following
the Processing Month End.  For the
avoidance of doubt, the cash reconciliation shall occur by the tenth Business
Day following the end of the subsequent Processing Month.


 


4                                         Management
Information associated with Processing


 


(i)                                     Dashboards by Local Agreement will
be created monthly by GEFA and reviewed at the monthly joint management meetings
that will show clearly the percentage of data Confirmed, Pending and Rejected
for a given month.


 


(ii)                                  Dashboards by Local Agreement will
be created monthly by GEFA reflecting the age of Notifications of Processing
which are classified as Pending or Rejected.


 


(iii)                               Dashboards by Local Agreement will
be created monthly by GEFA in respect of cancellation data including number of
policies cancelled, value of refunds, average expired term and average
remaining term, in each case by policy year.


 


(iv)                              Dashboards will be delivered by
GEFA within 10 Business Days of the Processing Month End.


 


5                                         New Policy
Fulfilment


 


Where GEFA is responsible for new policy
fulfilment, policy certificates and/or policy documentation as applicable will
be issued by GEFA within 3 Business Days of the date of Confirmation unless an
Existing Local Agreement or Applicable Law provides otherwise.


 


6                                         Telephony


 


6.1                               In-Bound


 


(i)                                     A dedicated GECC line will be in
place in respect of each Local Agreement.


 


(ii)                                  All calls shall be answered in the
locally agreed format.


 


(iii)                               80% of calls will be answered
within 20 seconds in any Processing Month. Where the required technology is not
in place to provide metrics, an audit will be carried out by GEFA in respect of
an appropriate number of calls relative to the volume normally received in
respect of the relevant Local Agreement.


 


(iv)                              In respect of calls to a GECC
dedicated line and where the required telephony systems are in place for the
purposes of measurement, the abandonment rate will not exceed 5% during any
Processing Month.


 


(v)                                 Dashboards will be created monthly
by GEFA and reviewed at the Monthly Performance Meetings.  Such dashboards will show clearly the volume
of calls, 


 


55

















 


the percentage answered within the Service
Level, the average response time and the abandon rate where applicable.


 


(vi)                              GECC will monitor the average
response time and, if it trends towards 20 seconds, the Parties will discuss at
the next Monthly Performance Meeting the implementation of an improvement plan.


 


6.2                               Out-Bound


 


(i)                                     In the event of an out-bound call
being required and where the initial attempt fails, two further attempts will
be scheduled prior to falling back on written communication. The second attempt
will be within 24 hours. The third attempt will be the next Business Day.


 


(ii)                                  Addressing the customer - the
manner and format of the customer interaction (including greeting & company
name) will be agreed at a local level.


 


7                                         General Queries
& Correspondence


 


(i)                                     GEFA shall date stamp 100% of
incoming correspondence on the day of receipt or, if such day is not a Business
Day (or if received after the end of the hours of service on a Business Day),
on the next Business Day. In the event of uncertainty as to the date of
receipt, the date of receipt shall be deemed to be the fourth Business Day
after the mean date on which the envelopes containing such correspondence
(including claims) were franked.


 


(ii)                                  GEFA will respond to 100% of
correspondence within 5 Business Days of receipt by GEFA.


 


(iii)                               Unless otherwise stated in this
agreement, GEFA will answer 100% of requests from GECC received by telephone,
e-mail or post by the end of the next Business Day.


 


7.2                               Claims Queries and
Notification


 


7.2.1                     Telephone Requests


 


(i)                                     GEFA will respond to requests
received by telephone for information regarding individual policies or claims
during the call or by the end of the next Business Day if further investigation
is required.


 


(ii)                                  If the attempt to contact the customer
is unsuccessful, 2 further attempts will be made. If these are unsuccessful,
the response will be sent by post.


 


(iii)                               Claim forms requested by telephone
will be dispatched by the end of the next Business Day unless printing of name
and address is required, in which case the claim form shall be dispatched
within 3 Business Days of the request.


 


56

















 


7.3                               Claim Notification
by Mail


 


(i)                                     GEFA shall respond within 3
Business Days to 100% of all incoming new claim form requests received by mail.


 


(ii)                                  GEFA shall respond within 3
Business Days to 100% of all incoming continuing claim form requests received
by mail.


 


7.4                               Claim Handling


 


(i)                                     95% of all claims registration
forms and continuing claims forms received will be assessed and the proper
response issued by GEFA within 5 Business Days of receipt. 100% of all claims
registration forms and continuing claims forms received will be assessed and
the proper response issued by GEFA within 10 Business Days of receipt.


 


(ii)                                  The average elapsed time for
assessing and responding to claims registration forms and continuing claims
forms will be not more than 3 Business Days from receipt.


 


(iii)                               At the end of a Processing Month,
no more than 5% of claims which have not been assessed shall be claims which
were received by GEFA more than 10 Business Days prior to the end of that
Processing Month.


 


(iv)                              GEFA will respond to 100% of all
incoming claims correspondence within 5 Business Days of receipt.


 


(v)                                 Claims assessment shall result in
one of the following:


 


(a)                                  decision to decline;


 


(b)                                 decision to accept/pay; or


 


(c)                                  decision to request further
information from a customer/third party,


 


and, where appropriate, GEFA shall generate
any documentation associated with the assessment.


 


(vi)                              Decline process:


 


A system generated letter is issued
explaining the decision as part of the assessment process.


 


(vii)                           Decision to accept/pay process:


 


(a)                                  A letter will be sent to the
customer confirming the acceptance of the claim and the payment to be made,
clarifying any continuing duty on the customer (e.g. monthly provision of
evidence) and including a continuing claim form.


 


57

















 


(b)                                 A payment run will be executed at
least weekly, unless otherwise stated in an Existing Local Agreement.


 


(viii)                        Further information required:


 


(a)                                  Where further information is
required from a third party it will be notified to that third party by mail
with a pre-paid business reply envelope. A letter informing the customer of
this action will be issued at the same time.


 


(b)                                 Where further information is
required from a customer he/she will be notified by mail with a pre-paid
business reply envelope.


 


(c)                                  21-day follow up will occur if
there is no response received back from the third party.


 


8.                                      Management
Information associated with managing claims


 


8.1                               The monthly dashboard for claims
will show as a minimum:


 


(i)                                     the claims activity for the month
comprising new claims registered, continuing claims, claims accepted, claims
declined and pending duration (comprising number of claims pending and maximum,
median and mean number of days pending);


 


(ii)                                  number and percentage of claims
processed within the Service Level criteria for the period and average claim
resolution time;


 


(iii)                               number of outstanding claims to be
assessed and outlook for following month;


 


(vi)                              percentage of correspondence
responded to within the Service Level; and


 


(v)                                 report on the results of the Claims
Accuracy Audit.


 


The monthly dashboard will be delivered to
GECC within 10 Business Days of Processing Month End.


 


9                                         Claims Accuracy
Audit


 


9.1                               Claims accuracy will be measured
through an audit mechanism operated  by
GEFA and on an ad-hoc basis by GECC. Claims Decision Accuracy is based on the
decision to pay/reject the claim based on the terms and conditions of the
policy against the criteria set out in the claim form.


 


9.2                               The Service Levels for Claims
Decision Accuracy shall be:


 


(i)                                     GEFA shall allocate 100% of claims
with a classification code (Redundancy/Disability/Critical illness etc).


 


(ii)                                  Accuracy of classification code
allocated by GEFA shall exceed 99%.


 


58

















 


(iii)                               Decision Accuracy shall be:


 


(a)                                  97% or greater in calendar year
2004;


 


(b)                                 98% or greater in calendar year
2005; and


 


(c)                                  99% or greater in calendar year
2006,


 


on all GECC claims audited within the monthly
audit period,


 


provided that, in respect of New Territories,
Decision Accuracy shall be 97% or greater on all GECC claims audited within
each monthly audit period in the 12 months following launch and thereafter
shall be 99% or greater on all GECC claims audited within the monthly audit
period.


 


10                                  Customer
Satisfaction Surveys


 


10.1                        Twice in every 12 months GECC will
have the right to commission or carry out customer surveys in order to gauge
the overall customer satisfaction level of the customer base. The aspirational
target will be 80% satisfaction.  GECC
and GEFA shall run base line surveys in respect of all Local Agreements in the
first 12 months after the Commencement Date. 
The costs of such surveys shall be shared equally by the Parties.  A mutually agreed action plan will be
implemented and shall include a target for surveys conducted in the next period
on the basis of the results of the base line surveys.


 


10.2                        Each Party, at the request of the
other, shall on an ad hoc basis (but, save as otherwise provided below, in any
event no more frequently than once in any 12 month period) conduct a
satisfaction survey on the basis of a mutually agreed set of questions which
shall seek to establish the degree to which the requesting party is satisfied
with the performance by the other party of its obligations under this schedule.
On the basis of such survey the Parties shall implement a mutually agreed
action plan which shall include a target for the next survey.  If the requesting Party is unhappy with the
results of any survey, a further survey shall be conducted within six months of
the results of the previous survey or such other period of time as the Parties
shall agree.


 


11                                  Complaints
Handling Process


 


11.1                        The definition of a complaint is
“any expression of dissatisfaction whether justified or not”. Complaints shall,
for the avoidance of doubt, include disputes in relation to claims decisions.


 


11.2                        A complaint must be dealt with to
the customer’s satisfaction upon receipt of the phone call or the letter.  If this is not possible, GEFA shall
endeavour to provide the customer with a solution by close of business on next
Business Day following receipt.  Within
5 Business Days of receipt by GEFA of the complaint , the customer must be sent
an acknowledgement letter advising them of a specific timeframe in which GEFA
expects to resolve the problem.  This
should be recorded on a complaints log.


 


59

















 


11.3                        If the complaint remains unresolved
by the end of the 10th Business Day following receipt by GEFA of the claim,
GEFA must escalate the complaint to Level 2, escalate to the Claims Manager or
equivalent and reflect this on the log. If the complaint is still not resolved
by Business Day 19, the complaint must be passed to Level 3.


 


11.4                        In Level 3 the complaint shall be
escalated to the Operations Manager or equivalent.  GEFA will endeavour to resolve the complaint within 8 weeks
following initial receipt.  If this is
not achieved, the team will issue a holding response.  If a solution is still not reached, the complaint handler will
issue a final response. This will confirm to the customer that GEFA’s
complaints procedure has been exhausted, and advise the complainant that he or
she may refer the complaint to the Financial Ombudsman Service within 6 months
of the date of the issue of this response.


 


11.5                        Where the Financial Ombudsman
Service (or its equivalent in a Territory outside the UK) adheres to different
guidelines than those outlined above at a local level then the local guidelines
will be the service standard.


 


11.6                        GEFA shall notify to GECC all
complaints on reaching Level 3 and in the case of  complaints which are sensitive or controversial GEFA shall notify
GECC immediately.


 


11.7                        Dashboard of Complaints showing
volume, status and escalation level by type of complaint to be discussed at
Monthly Performance Meetings with focus on root cause analysis.


 


12                                  IT Services


 


12.1                        New scheme launches in Existing
Territories, re-pricing, rate changes and interface programme amendments shall
be in place in time for GECC deadline. Such deadline will always be at least 5
Business Days after GECC has notified GEFA.


 


12.2                        Performance of the obligation at
paragraph 12.1 above shall be dependent on the following:


 


(i)                                     final product specifications
including rates shall be provided as part of notification and at least  45 Business Days before implementation
deadline;


 


(ii)                                  mutually agreed file format for new
Scheme launches in all Territories shall be agreed and finalised at least  45 Business Days before implementation
deadline; and


 


(iii)                               representative and accurate test
data which reflects the ‘to be’ file, in the previously agreed file format and
with a sufficient level of detail to enable testing shall be provided by GECC
20 Business Days prior to commencement.


 


12.3                        Ad hoc requests for IT work will be
assessed on their merits.


 


60

















 


13                                  Pricing Requests


 


13.1                        GEFA will deliver a response to
pricing requests within 7 Business Days of receipt of a full product
specification.


 


13.2                        The full product specification
supplied by GECC shall comprise the information set out at paragraph 4 of Part
A of Schedule 5, to the extent applicable and, in addition, clarification
of any change in the customer base characteristics and miscellaneous detail
when compared with other products in the appropriate Territory, if available.


 


14                                  Finance Requests


 


14.1                        GEFA shall achieve 100% accuracy on
profit share statements.  Accuracy shall
be measured by reference to the data used in GEFA’s US GAAP accounts and
subsequently entered into the GECC profit share accounts and the structure of
such profit share accounts.


 


14.2                        GEFA shall deliver profit share
statements within 90 days of the end of each quarter.


 


14.3                        In the event of a financial query
arising, GEFA will communicate to GECC a proposed course of action (including
proposed timescales for resolution) by the end of the following Business Day


 


15                                  Legal Requests


 


15.1                        Representatives of the Parties’
legal and compliance teams shall meet at appropriate intervals to discuss the
prioritisation and targets for delivery of the work to be performed by the
Parties’ legal and compliance teams pursuant to this agreement.


 


15.2                        GEFA shall, subject to paragraphs
15.1, 15.3, 15.4 and 15.5, deliver:


 


(i)                                     initial comments on new policy
documents or proposed changes to existing policy documents (in each case
relating to Payment Protection Products provided pursuant to Existing Direct
Business) by the later of:


 


(a)                                  10 Business Days after receipt by
the GEFA legal and compliance team of the request to provide such comments and
all of the relevant draft documents and information requested in relation
thereto (including documents and/or information requested from GECC or any GECF
Group Company); and


 


61

















 


(b)                                 the date by which the relevant GECF
Group Company requests such comments to be provided;


 


(ii)                                  initial comments on new fulfilment
and marketing documents or proposed changes to existing fulfilment and
marketing documents (in each case relating to Payment Protection Products
provided pursuant to Existing Direct Business) by the later of:


 


(a)                                  10 Business Days after receipt by
the GEFA legal and compliance team of the request to provide such comments and
all of the relevant draft documents and information requested in relation
thereto (including documents and/or information requested from GECC or any GECF
Group Company); and


 


(b)                                 the date by which the relevant GECF
Group Company requests such comments to be provided;


 


(iii)                               subject to acceptance by GECC or
the relevant GECF Group Company of a New Business Proposal (or Amended New
Business Proposal) pursuant to paragraph 10 of Part A of Schedule 5 (if
applicable), a first draft of a Local Addendum by the later of:


 


(a)                                  15 Business Days after receipt by
the GEFA legal and compliance team of the request to provide such first draft
and all of the relevant information requested in relation thereto (including
information requested from GECC or any GECF Group Company); and


 


(b)                                 the date by which the relevant GECF
Group Company requests such draft to be provided,


 


subject in each case, to such Local Addendum
being substantially in the form set out in Schedule 11; and


 


(iv)                              subject to acceptance by GECC or
the relevant GECF Group Company of a New Business Proposal (or Amended New
Business Proposal) pursuant to paragraph 10 of Part A of Schedule 5, a
first draft of a New Local Agreement by the later of:


 


(a)                                  20 Business Days after receipt by
the GEFA legal and compliance team of the request to provide such first draft
and all of the relevant information requested in relation thereto (including
information requested from GECC or any GECF Group Company); and


 


(b)                                 the date by which the relevant GECF
Group Company requests such draft to be provided,


 


subject in each case, to such New Local
Agreement being substantially in the form set out in Schedule 12.


 


15.3                        GECC agrees and acknowledges that
if any of the documents requested or provided from or to the GEFA legal and
compliance team pursuant to paragraph 15.2 are not, or not required to be in
English, the timescales set out in paragraph 15.2 for delivery of comments or
draft documents (as the case may be) will, in each such case, be increased by
10 Business Days or such longer period as is reasonably required to obtain an
English translation of all relevant 
documents.


 


62

















 


15.4                        If changes are required to any
Local Agreement or any documents relating to the Payment Protection Products
provided by GEFA pursuant to this Agreement as a result of any proposed changes
to any Applicable Law, GEFA will provide GECC with details of the proposed
changes to the relevant documents at least 90 days before the implementation
date of the proposed change to the relevant Applicable Law unless otherwise
agreed by the parties (each acting in good faith), subject to receipt by the
GEFA legal and compliance team of all of the relevant information requested in
relation thereto (including information requested from GECC or any GECF Group
Company).


 


15.5                        The period for the production or
review of documents by the GEFA legal and compliance team for a GECF Group
Company in all other circumstances not contemplated in sub-paragraphs 15.2-15.4
above will be agreed by the parties at the time (each acting in good faith).


 


16                                  Business
Continuity


 


16.1                        GEFA shall maintain a business
recovery plan to make provision for the prompt and efficient handling of any
incident which impairs GEFA’s ability to perform the obligations required of it
by this schedule.


 


(i)                                     GECC shall be made aware of the
details of the business recovery plan and be kept advised of any significant
changes to those details.


 


(ii)                                  The business recovery plan shall be
subject to testing and review for effectiveness once a year.


 


16.2                        A major disruption in service that
impairs GEFA’s ability to achieve a Service Level shall  be notified to the agreed GECC escalation
point if reasonably practicable on the Business Day on which the event occurs
and otherwise within one Business Day of such event.


 


17                                  Dependencies


 


GEFA shall not be liable for, and Service
Credits shall not accrue in respect of, any failure by GEFA to meet its
obligations in relation to Service Levels, where such failure results in whole
or in part from:


 


(i)                                     any failure by GECC to perform its
obligations under this schedule, including those obligations set out in the
third column of Table A below; or


 


(ii)                                  any other act or omission of GECC.


 


63

















 


Table A


 


GECF Dependencies


 


	
  GEFA Key

  Service Levels

  	
   

  	
  MEASUREMENT

  	
   

  	
  GECF DEPENDENCY

  
	
  Paragraphs 3.1(v) and 3.2(ii) of this
  Schedule

  	
   

  	
  Monthly Dashboards of NIP - Confirmed,
  Pending and Rejected.

  	
   

  	
  NIP file must be received in the agreed
  format by GEFA at least 5 Business Days prior to Processing Month End and be
  relevant to the previous selling month. Any files received less than 5
  Business Days prior to Processing Month End will be included in the following
  processing month.

  
	
   

  	
   

  	
   

  	
   

  	
  Pending list sent by GEFA to GECC must be
  reviewed, amended and sent back to GEFA within 5 Business Days of initial
  receipt by GECC.  NIP which is missing
  information or information which is contrary to agreed parameters will be
  rejected and fall back in to the Pending process loop.

  
	
  Paragraph 3.2(ii) of this Schedule

  	
   

  	
  [   ]

  	
   

  	
  The cash reconciliation is subject to
  receipt by GEFA of all relevant cash amounts payable by GECC pursuant to
  paragraph 3.2(i) by the end of the Processing Month subsequent to the
  Processing Month in respect of which the Reconciliation is performed.

  
	
  Paragraph 3 of this Schedule

  	
   

  	
  [   ]

  	
   

  	
  GEFA’s Service Level obligations under
  paragraph 3 of this schedule shall commence on or shall be suspended
  until (as the case may be) the later of:

  
	
   

  	
   

  	
   

  	
   

  	
  (i)(a) in respect of New Scheme launches in
  Existing Territories, the expiry of 45 Business Days from the date on which
  the file format is agreed pursuant to paragraph 12.2(ii) above or, if later,
  the expiry of 45 

  



 


64

















 


	
  GEFA Key

  Service Levels

  	
   

  	
  MEASUREMENT

  	
   

  	
  GECF DEPENDENCY

  
	
   

  	
   

  	
   

  	
   

  	
  Business Days from the date on which GECC
  notifies GEFA of the final product specification pursuant to paragraph
  12.2(i) above; or (i)(b) in respect of re-pricing, rate changes and interface
  amendments, the expiry of 45 Business Days from the date on which GECC
  notifies GEFA of the final product specification pursuant to paragraph
  12.2(i) above; and (ii) the expiry of 20 Business Days from the date on which
  GECC complies with its obligation in paragraph 12.2(iii) above.

  
	
  Paragraphs 7.3(i) and 7.3(iii) of this
  Schedule

  	
   

  	
  Monthly Dashboards/ Sampling as required.

  	
   

  	
  GECC response required within one Business
  Day for claims against bulk business where input from GECC will be required.

  



 


18                                  Key Service Levels


 


Service Credits shall be weighted to the Key
Service Levels as set out in Table B below:


 


Table B


 


19                                  Primary
Operational Metrics and Service Credits


 


	
  Primary Operational Metrics -

  Service Standards

  	
   

  	
   

  
	
  **

  	
   

  	
  **

  
	
  **

  	
   

  	
  **

  
	
  **

  	
   

  	
  **

  
	
  **

  	
   

  	
  **

  
	
  **

  	
   

  	
  **

  
	
  **

  	
   

  	
  **

  
	
  **

  	
   

  	
  **

  



 


65

















 


20                                  Service Credit
regime


 


20.1                        If GEFA fails to deliver the
service as indicated by any of the above Key Service Level metrics in respect
of a Local Agreement then GEFA shall reimburse GECC for the Service Credits.


 


20.2                        Service Credits are applied to the
specific Local Agreement that is in breach of Key Service Level.


 


20.3                        One Service Credit equals **% of
the Retention Fee in respect of the relevant Local Agreement in that month:


 


20.4                        Service Credits start accumulating
in the same Processing Month in which a Key Service Level miss occurs.


 


20.5                        Service Credits shall be paid in
respect of a Key Service Level until such Key Service Level returns to agreed
Service Levels.


 


20.6                        No Service Credits shall accrue or
be payable in respect of failures to meet Key Service Levels in the first six
months of the Term.


 


20.7                        Service Credits relate to new
business going forward and not retrospectively to feeds received prior to the
expiry of the period referred to in paragraph 19.6 above.


 


20.8                        For the avoidance of doubt, clause
15 of the agreement shall apply to this schedule.


 


66

















 


Schedule 3

New Local Agreement Profit Share Provisions


 


1                                         GEFA shall draw up a profit and
loss account in accordance with this Schedule and GEFA’s standard US GAAP
accounting policies and practices from time to time (the “Profit Share
Account”) including all Schemes grouped as agreed by the Parties in each Local
Agreement separately (or, if only one Scheme has been in operation since the
Commencement Date, for that Scheme only):


 


•                                          as at the last day of each quarter
of the term of the Local Agreement and annually during the Run-Off Period; or


 


•                                          as at the end of the Run-Off
Period,


 


(each a “Relevant Date”).


 


2                                          GEFA shall deliver a copy of the
Profit Share Account to GECC within 90 days (or as otherwise agreed between the
Parties pursuant to Schedule 2) of the last day of each quarter of the
term of this agreement and annually during the Run-Off Period and within 90
days of the last day of the Run-Off Period (as the case may be).


 


3                                          The Profit Share Account will be
prepared to include all Business written since inception to date in each Scheme
in each Territory as follows:


 


1.                                       For each individual Scheme, GEFA
shall calculate the Gross Earned Premiums


 


2.                                       From the total calculated under
paragraph (a) above, the following shall be deducted:


 


1.                                       the Sales Commission incurred;


 


2.                                       Earned Retention;


 


3.                                       all claims payments made under the
relevant Policies and related expenses incurred;


 


4.                                       Claims Reserves as held on the GEFA
balance sheet for future claims payments under the relevant Policies as at the
date to which Profit Share is being calculated;


 


5.                                       all applicable Tax/levies;


 


6.                                       all statutory, governmental or
regulatory fees arising from or relating to a complaint made by an Insured
Customer; and


 


7.                                       agreed extraordinary expenses
incurred.


 


67

















 


3.                                       The resultant figure shall be the
underwriting profits (the “Underwriting Profits”) for the individual Scheme
concerned. The Underwriting Profits for any individual Scheme may be positive
or negative.


 


4.                                       Subject to this Schedule 3,
the Profit Share for the individual Scheme concerned shall be calculated by
multiplying the Underwriting Profits for that Scheme by the relevant GECC
Profit Share Percentage pursuant to Clause 5. The Profit Share for any
individual Scheme may also be positive or negative.


 


5.                                       If more than one Scheme qualifying
for Profit Share calculation purposes has been in operation, GEFA shall
calculate the consolidated profit or loss for all such Schemes within each
Local Agreement by aggregating together all and any positive and negative
Profit Shares for all relevant individual Schemes calculated under paragraphs
(a) to (d) above.


 


6.                                       The Profit Share calculated as at
the relevant date (which may be positive or negative) shall be the amount
calculated under paragraphs (a) to (d) above (or, if more than one Scheme has
been in operation, paragraphs (a) to (e) above):


 


1.                                       less an amount equal to any payments
made by GEFA to GECC under paragraph 4 below in respect of previous Profit
Share calculations;


 


2.                                       plus an amount equal to any
payments made by GECC to GEFA under paragraph 5 below in respect of previous
Profit Share calculations;


 


3.                                       less an amount equal to any previous
Profit Share payments made by GEFA to GECC which GECC has repaid or is due to
repay to GEFA for any reason.


 


4                                         If the Profit Share calculation is
** then GEFA shall ** thereof to GECC within 30 Business Days of delivery of
the Profit Share Account (which for the avoidance of doubt shall include the
Profit Share Account at the end of the Run-Off Period).


 


5                                         If the Profit Share calculation in
respect of any Local Agreement in any calendar year is ** then the ** amount
shall be ** years. If at the termination of this agreement the Profit Share
Calculation is **, then ** shall be made and the ** amount shall be ** the end
of the Run-Off Period.  If at the end of
the Run-Off Period the Profit Share calculation is still ** then GECC shall ** amount
thereof to GEFA within 30 Business Days of delivery of the Profit Share
Account. In no event will this sum ** Profit Share payment has been made.


 


6                                         For the avoidance of doubt, **
shall be ** to GECC or to GEFA in respect of any period ending after the end of
the last day of the Run-Off Period.


 


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Schedule 4

Product Performance Monitoring


 


1.                                      The Claims
Performance Statement


 


GEFA will provide to GECC
a Claims Performance Statement on a quarterly basis to show the following
information for each Scheme, product and cover type in respect of each Local
Agreement. The following information will be shown for each quarter for the
last two years (the most recent quarter to be included will be that which ended
six months prior to the date of the quarterly Profit Share Account):


 


•                                          Earned Exposure in the quarter;


 


•                                          Gross Earned Premium;


 


•                                          Earned Claims Fund;


 


•                                          Number of claims (including an
estimate for claims which have occurred in that quarter but have not yet been
reported);


 


•                                          Claims paid;


 


•                                          Claims reserved by type;


 


•                                          Claims Frequency;


 


•                                          Average duration of claims where
relevant (e.g. for Accident and Sickness and Involuntary Unemployment claims);


 


•                                          Gross Loss Ratio; and


 


•                                          Risk Loss Ratio.


 


GEFA will include the data
from the two quarters immediately preceding the end of the quarterly Profit
Share Account, but the Parties acknowledge that the performance reflected by
such data will not be mature because the development of reported claims takes
two quarters and the detailed analysis will not yet be available.


 


Each claim will be
allocated to a quarter in accordance with the date in which the claim occurred.


 


GEFA shall provide the
first Claims Performance Statement to GECC based on data as at 31st
December 2003 on or by 31st March 2004.


 


GECC and GEFA hereby agree
that discussions relating to individual Schemes shall be restricted to those
Schemes which are agreed to be of a size where the claims performance has
stabilised but in determining whether or not such stabilisation has 


 


69

















 


occurred the Parties shall
have regard to the performance of the relevant Schemes before they become
subject to a Local Agreement as well as after.


 


In respect of Existing
Business, GECC hereby agrees that if a Local Agreement, product or individual
Scheme is identified at the Quarterly Performance Meeting as running at Loss
Ratio greater than ** per cent., the Parties shall as soon as reasonably
practicable hold good faith discussions to attempt to agree a plan and timetable
for actions to bring any such Scheme or product to a Loss Ratio of ** per cent.
Such plan shall include one or more of the following:


 


•                                          Make changes to the amount of
premium allocated to a particular cover;


 


•                                          Increase the Claims Fund as a
percentage of the Gross Written Premium;


 


•                                          Make a change to the terms and
conditions of the Policies in a particular scheme; or


 


•                                          Such other mechanism as agreed
between the Parties.


 


In respect of New
Business, GEFA hereby agrees that if a Local Agreement or individual Scheme is
identified at the Quarterly Performance Meeting as running at a Loss Ratio less
than ** per cent or more than ** per cent, the Parties shall as soon as
reasonably practicable hold good faith discussions to attempt to agree a plan
and timetable for actions to bring any such Scheme or product or cover to a
Loss Ratio of ** per cent. Such plan shall include one or more of the
following:


 


•                                          Make changes to the amount of
premium allocated to a particular cover;


 


•                                          Decrease the Claims Fund as a
percentage of the Gross Written Premium;


 


•                                          Make a change to the terms and
conditions of the Policies in a particular scheme; or


 


•                                          Such other mechanism as agreed
between the Parties.


 


Any losses not previously
notified by the date of this agreement or in the relevant quarter will not be
carried forward and shall be borne ** per cent. by the relevant GEFA Company.


 


If a Loss Ratio in respect
of a Local Agreement is greater than **% and Parties agree such plan and if
GECC fails to implement the plan in accordance with the timetable agreed at the
Quarterly Performance Meeting, the current profit share split and arrangements
shall continue to apply in accordance with the relevant Local Agreement but
GECC will carry forward GEFA’s **% share of such underwriting loss.


 


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Schedule 5

Potential New Business and Payment Protection

Products Set-up Process


 


The processes for determining whether
Potential New Business shall be New Business and the set-up of New Business in
a Territory are set out below in Parts A and B.  The processes for addressing Material Change and Local Material
Change referred to in Clauses 20.2.3 and 20.4.4 are set out in Part C below.


 


PART A Potential New Business in New
Territories where there is no Local Agreement


 


In relation to Potential New Business in New
Territories where a Local Agreement is not in place (the following shall also
apply to Potential New Business in Existing Territories or in Territories in
which a Local Agreement is in place, subject to the provisions of Part B of
this Schedule 5):


 


1                                         Notification


 


(i)                                     GECC shall, or shall procure that
the relevant GECF Group Company shall, notify in writing the relevant Country
Manager, relevant Regional Manager and GECC Relationship Manager, as soon as
reasonably practicable of any Potential New Business required, with details of
the Payment Protection Product or package of Payment Protection Products
required and related services together with details of the proposed
implementation timetable (which is to be reasonable and have regard to all
circumstances).  Notification shall be
deemed to be given upon receipt of the notice by GEFA.


 


(ii)                                  If GEFA or a GEFA Company shall
advise GECC or the relevant GECF Group Company in writing of its intention to
submit a New Business Proposal to GECC in respect of Potential New Business,
this will initiate the process described from paragraph 4 below onwards.


 


2                                         GEFA will then undertake basic fact
finding on the insurance market, legal and regulatory systems in the
prospective New Territory.


 


3                                         Within 7 Business Days of
notification pursuant to paragraph 1 by GECC, or the relevant GECF Group
Company, to GEFA, or the relevant GEFA Company,  the relevant GEFA Company may provide in writing to the relevant
GECF Group Company an expression of interest in providing the Potential New
Business.


 


4                                         If the relevant GEFA Company has
provided the expression of interest within 7 Business Days in accordance with
paragraph 3 above, the relevant GECF Group Company will provide the relevant
GEFA Company as soon as reasonably practicable with the following information
in its or any GECF Group Company’s possession or control on the Payment
Protection Products and related services as set out in the notification given 


 


71

















 


pursuant to paragraph 1,
subject to Applicable Laws and any confidentiality obligations on it:


 


•                                          Size, age, statistics, male/female
split, average term (actual and written) and interest charged on loans


 


•                                          Description of the required Payment
Protection Products which is as complete as is possible or a copy of the
existing policy wording(s)


 


•                                          Projected finance volumes and the
projected insurance penetration rates over 3 years


 


•                                          Historic gross premium volumes or
historic finance volumes and insurance penetration rates


 


•                                          Existing gross premium rates


 


•                                          Location of GECC, GECF Group
Company or Acquired GECF Business offices in country


 


•                                          Existing method of reporting (i.e.
paper application, electronic file)


 


•                                          Method of premium collection


 


•                                          Number of insured customers


 


•                                          Method of policy fulfilment (GECC
or Insurer)


 


•                                          Staffing levels and facilities
costs per associate to locate in existing GECC or Acquired GECF Business
offices per country and general GECC Human Resources support/advice (if
available)


 


•                                          Historic loss ratios and definition
of loss ratios


 


•                                          Any other pertinent information
(including any renewal, termination or expiry dates of agreements with third
parties)


 


Upon providing the above
information to the relevant GEFA Company, the relevant GECF Group Company shall
certify that, subject to confidentiality obligations and Applicable Laws, it
has provided all such information.


 


5                                         Within 20 Business Days of the date
of certification provided by the relevant GECF Group Company pursuant to
paragraph 4 above, GEFA shall procure that the relevant GEFA Company shall
prepare and submit to the relevant GECF Group Company a written proposal (the “New Business Proposal”) setting out its
proposed terms and conditions for the provision of Payment Protection Products
and related services for the Potential New Business, which shall include the
following:


 


72

















 


5.1                               confirmation that the New Business
Proposal is for the provision of the totality of the required Payment
Protection Products and related services required for the relevant GECF Group
Company or Acquired GECF Business as notified by GECC pursuant to paragraph 1;


 


5.2                               the commercial terms for the
provision of the Potential New Business which shall be:


 


5.2.1                     in accordance with clause 5 of this
agreement (for the avoidance of doubt, if the Potential New Business involves a
New Channel, the Retention Rate may be altered pursuant to Paragraphs 7.1-7.3
of Part III of Schedule 16); and


 


5.2.2                     in relation to Potential New
Business required for an ** (provided that the terms disclosed to GEFA pursuant
to paragraph 4 above are the bona fide terms);


 


5.3                               confirmation that, where the
relevant GECF Group Company or Acquired GECF Business has existing arrangements
or agreements with a third party or another company in its Group, the relevant
GEFA Company will ** the relevant GECF Group Company or Acquired GECF Business
in accordance with the terms of clause 3.2.5(i)(b) for ** (which have been
disclosed pursuant to paragraph 4 by GECC or a GECF Group Company and which
would be incurred in **;


 


5.4                               the proposed implementation
timetable for providing the Payment Protection Products and related services;


 


5.5                               confirmation that the relevant GEFA
Company has obtained the required regulatory or other licences to provide the
required Payment Protection Products and related services in the Territory to
the relevant GECF Group Company or Acquired GECF Business or, if the relevant
GEFA Company does not hold the required regulatory or other licences, the
proposed steps and timetable for obtaining such licences;


 


5.6                               details of:


 


5.6.1                     a plan setting out the various
steps, tasks and resources required to implement the Potential New Business
with a timetable and responsibilities;


 


5.6.2                     any (i) branch set up with GEFA
office & administration in the Territory; or (ii) office &
administration set up in a neighbouring Territory; or (iii) partnership with
local companies to provide administration and related services;


 


5.6.3                     GEFA IT & Operations support;


 


73

















 


5.6.4                     GEFA Legal support on legal and
regulatory issues in the Territory in relation to the provision of Payment
Protection Products and related services;


 


5.6.5                     GEFA Finance and Risk support in
relation to finance and risk issues in the Territory in relation to the
provision of Payment Protection Products and related services;


 


5.6.6                     confirmation of applicable GEFA
internal risk approval; and


 


5.6.7                     GECC HR support/advice required;
and


 


5.7                               whether it wishes the relevant GECF
Group Company or Acquired GECF Business to host GEFA start up offices within
their premises at a cost equivalent to GECF Group Companies or Acquired GECF
Business ** from the Commencement Date of the relevant Local Agreement and the
terms of such arrangement.


 


6                                         Upon receipt of the New Business
Proposal, the relevant GECF Group Company shall assess the New Business
Proposal according to the requirements of the Potential New Business and
whether the following criteria have, in its reasonable opinion, in all material
respects been met:


 


6.1                               the New Business Proposal covers
all of the Payment Protection Products and related services as set out in the
notification made pursuant to paragraph 1 above;


 


6.2                               the New Business Proposal will be
able to operate within the Loss Ratio target of ** per cent.;


 


6.3                               Subject to Clause 9.4.7, GEFA is in
compliance with its obligations in respect of the Product Development Plan set
out in Clause 9.4.4 in the relevant Territory and, where GECC has informed GEFA
that GECC intends to provide the relevant Offering in an Existing Territory,
GEFA must have created and be implementing a Product Development Plan in
respect of the Existing Territory. 
Where GECC has informed GEFA that it intends to provide the Offering in
a New Territory as well as Existing Territories, GEFA must have:


 


6.3.1                     created a Product Development Plan
in respect of the New Territory; and


 


6.3.2                     created and be implementing a
Product Development Plan in respect of ** per cent. of the Existing Territories
in which GECC has informed GEFA that it intends to provide the Offering;


 


6.4                               the relevant GEFA Company will be
able to provide all of the Payment Protection Products and related services as
set out in the notification made pursuant to paragraph 1 above in compliance
with the Service Levels;


 


74

















 


6.5                               the relevant GEFA Company will be
able to commence provision of the Payment Protection Products and related
services within the timetable set out in the notification made pursuant to
paragraph 1 above;


 


6.6                               the relevant GEFA Company has
obtained or will have obtained the required regulatory or other licensing to
provide the required Payment Protection Products and related services in the
Territory in accordance with paragraph 5.5;


 


6.7                               in relation to an Existing
Territory or a Territory where a Local Agreement is in place, the relevant GEFA
Company has a system and infrastructure in place which will be able to
administer and support the Potential New Business;


 


6.8                               in relation to a New Territory
where there is no Local Agreement in place:


 


6.8.1                     the relevant GEFA Company will have
a system and infrastructure in place which will be able to administer and
support the Potential New Business within the timetable set out in the
notification made pursuant to paragraph 1 above; and


 


6.8.2                     in at least one of the previous two
months from the date of GEFA’s proposal the relevant GEFA Companies shall
either:


 


(i)                                     not have accrued Service Credits;
or


 


(ii)                                  (in the first six months of the
Term) are and have been complying with the Key Service Levels,


 


in at least 75 per cent.
of the Territories where a Local Agreement is in place including all of the Key
Territories; and


 


6.9                               in relation to an Existing
Territory, in at least one of the previous two months, the relevant GEFA
Company shall either (i) not have accrued Service Credits or (ii) (in the first
six months of the Term)  is and has been
complying with all the Key Service Levels; and


 


6.10                        the New Business Proposal has been
priced in accordance with the provisions of Paragraph 3 of Part II of
Schedule 16 (if the New Business Proposal does not involve a New Channel)
and Paragraphs 7.1-7.3 of Part III of Schedule 16 (if the New Business
Proposal does involve a New Channel).


 


7


 


7.1                               If the New Business Proposal
satisfies the criteria set out in paragraph 6 above, the relevant GECF Group
Company shall within 10 Business Days of receipt of such New Business Proposal,
give written notice to the relevant GEFA Company of its acceptance of the New
Business Proposal, subject to the relevant GEFA Company obtaining all necessary
regulatory approvals.


 


75

















 


7.2                               If the relevant GECF Group Company
rejects the New Business Proposal, it shall provide detailed written reasons
for such rejection setting out the criteria that have not been satisfied. Where
the relevant GECF Group Company rejects the New Business Proposal, the relevant
GEFA Company shall have the right within 5 Business Days of receipt of
notification of such rejection to:


 


(i)                                     propose amendments to the New
Business Proposal, in which case paragraph 8.2 shall apply; and/or


 


(ii)                                  refer the matter to the dispute
resolution procedure set out in clause 15.2, in which case the Parties shall
resolve the Dispute within 5 Business Days of the date of receipt by the
relevant GEFA Company of the notice rejecting the New Business Proposal (or
such longer period as the Parties may agree).


 


7.3                               If the requirements of paragraph 6
have not been satisfied the relevant GECF Group Company may propose to accept
the New Business Proposal, subject to such amendments as it sees fit, in which
case it shall inform the relevant GEFA Company in writing of such amendments
together with the reasons for such amendments, and paragraph 8 shall apply.


 


8                                         If the relevant GECF Group Company
proposes amendments to the New Business Proposal:


 


8.1                               the relevant GEFA Company may,
within 5 Business Days of the date of the notice of such proposed amendments,
resubmit an amended proposal in writing (the “Amended New Business Proposal”);
and


 


8.2                               upon receipt of the Amended New
Business Proposal, the relevant GECF Group Company shall assess such Amended
New Business Proposal according to the criteria set out in paragraph 6 above
and shall provide detailed written notice to the relevant GEFA Company of its
decision to accept or reject the Amended New Business Proposal (in the case of
rejection, with detailed written reasons) within 5 Business Days .


 


9


 


9.1                               Where the relevant GECF Group
Company rejects a New Business Proposal or Amended New Business Proposal
according to the criteria set out in paragraphs 6 above (other than on the
basis of the Risk Rate), GECC and the relevant GECF Group Company shall have no
obligation to appoint GEFA or any GEFA Company as its provider, whether
exclusive or otherwise, in the relevant Territory in respect of the New
Business Proposal and GECC shall be free to enter into discussions, tenders,
negotiations, arrangements and agreements with third parties and/or other GECF
Group Companies in respect of the relevant New Business Proposal. The relevant
GECF Group Company shall invite GEFA to take part in any subsequent tender
process conducted by the relevant GECF Group Company in respect of the New
Business Proposal provided that the relevant GEFA 


 


76

















 


Company agrees that the
provisions for determining the Retention Rate and the Risk Rate for the New
Business Proposal as set out in Parts II and Part III (as the case may be) of
Schedule 16 (Business Proposal Pricing Process) shall apply to their
submission save that, if an Actuary were to determine the Risk Rate pursuant to
Paragraphs 5 or 9.2 of Schedule 16 (as the case may be), then the relevant
GECF Group Company or the relevant GEFA Company would be entitled to reject the
proposed Risk Rate. In either case, the relevant GECF Group Company would be
entitled to award the tender to any third party.


 


9.2                               Where the relevant GECF Group
Company rejects a New Business Proposal or Amended New Business Proposal on the
basis of the proposed Risk Rate, then the procedure commencing in Paragraph 5
of Part II of Schedule 16 (if the Business Proposal does not involve a New
Channel) or the procedure commencing in paragraph 9.2 of Part III of
Schedule 16 (if the Business Proposal does involve a New Channel) shall be
implemented.


 


10                                  If pursuant to paragraph 7 or 8 or
9.2 above the relevant GECF Group Company and the relevant GEFA Company agree
the terms of the New Business Proposal (or the Amended New Business Proposal),
the relevant GECF Group Company and the relevant GEFA Company shall finalise
the terms of the addendum to the Local Agreement or, where relevant, the terms
of a New Local Agreement, provided that:


 


(i)                                     in relation to single premium
Potential New Business, whether such Potential New Business shall be ** shall
be determined by the relevant GECF Group Company in its absolute discretion
provided that Identified New Business shall be determined in accordance with
Schedule 1C; and


 


(ii)                                  in relation to monthly premium
Potential New Business, such Potential New Business shall be ** unless the
relevant GEFA Company, in its absolute discretion, consents to it being New **.


 


The parties shall make
available suitably senior representatives to finalise such terms.


 


11                                  Once the Local Addendum or New
Local Agreement (as the case may be) has been finalised pursuant to paragraph
10 above then, subject to the relevant GEFA Company having obtained and
providing written evidence to the relevant GECF Group Company that it has
obtained the required regulatory or other licences to provide the required
Payment Protection Products and related services in the relevant Territory, the
relevant GECF Group Company and the relevant GEFA Company shall promptly enter
into the addendum to the Local Agreement or New Local Agreement (as the case
may be) at which point the Potential New Business shall be New Business for the
purposes of this agreement.


 


12                                  If:


 


12.1                        the relevant GEFA Company has not
provided written notification of its expression of interest to the relevant
GECF Group Company within the 7 Business Day period in accordance with
paragraph 3 above;


 


77

















 


12.2                        the relevant GEFA Company has not
provided the New Business Proposal to the relevant GECF Group Company within
the 20 Business Day period in accordance with paragraph 5 above;


 


12.3                        where applicable, the relevant GEFA
Company has not provided the Amended New Business Proposal to the relevant GECF
Group Company within the 5 Business Day period in accordance with paragraph 8.1
above; or


 


12.4                        where applicable, the relevant GECF
Group Company has rejected the Amended New Business Proposal in accordance with
paragraph 8.2 above,


 


12.5                        and provided GECC or the relevant
GECF Group Companies have properly rejected the New Business Proposal or
Amended New Business Proposal (as the case may be), for the remainder of the
Term of this agreement, the relevant GECF Group Company or Acquired GECF
Business shall have no obligation to appoint, GEFA or any GEFA Company as its
provider, whether exclusive or otherwise, in the relevant Territory in respect
of the relevant Potential New Business the subject of the notification pursuant
to paragraph 1 and the relevant GECF Group Company or Acquired GECF Business
shall have no obligation to terminate or give notice of termination in relation
to any existing arrangements or agreements relating to the relevant Potential
New Business and shall be free to enter into discussions, tenders,
negotiations, arrangements and agreements with third parties and/or other
companies in its Group in respect of the relevant Potential New Business.


 


Part B Potential New Business in Existing
Territories or Territories where a Local Agreement is in place


 


In relation to Potential New Business in
Existing Territories or Territories where a Local Agreement is in place, the
following paragraphs of Part A shall apply as amended below:


 


13                                  paragraph 1;


 


14                                  paragraph 3;


 


15                                  paragraph 4;


 


16                                  paragraph 5 provided that
references to “20 Business Days” shall be read as references to “10 Business
Days”


 


17                                  paragraph
6;


 


18                                  paragraph
7;


 


19                                  paragraph
8;


 


20                                  paragraph
9;


 


78

















 


21                                  paragraph
10 ;


 


22                                  paragraph 11; and


 


23                                  paragraph 12 provided that  references to “20 Business Days” in
paragraph 12.2 shall be read as references to “10 Business Days”;


 


Part C: Material Change Process


 


If, pursuant to clause 20.2.3 or 20.4.4, GECC
has issued a written notice to GEFA, the procedure to be followed shall be as
follows:


 


24                                  GECC shall, or shall procure that
the relevant GECF Group Company shall, and GEFA shall, or shall procure that
the relevant GEFA Company shall, enter into good faith discussions for a period
of 30 Business Days commencing on the date of the notice issued pursuant to
clause 20.2.3 or clause 20.4.4 (the “Consultation Period”) to seek to agree an
appropriate solution to the Material Change or Local Material Change (as the
case may be).


 


25                                  On or by the date falling 20
Business Days after the end of the Consultation Period, GEFA shall, or GEFA
shall procure that the relevant GEFA Company shall, prepare and submit to GECC
or the relevant GECF Group Company a written proposal (the “Material Change
Proposal”) setting out its proposed or amended terms and conditions for the
provision of Payment Protection Products and related services in response to
the Material Change or Local Material Change (as the case may be) (the
“Material Change Business”), which shall include the following:


 


25.1                        confirmation that the Material
Change Proposal is for the provision of all of the required Payment Protection
Products and related services required by GECC or the relevant GECF Group
Company as notified by GECC pursuant to clause 20.2.3 or clause 20.4.4;


 


25.2                        the commercial terms for the
provision of the Material Change Business which shall be in accordance with
clause 5 of this agreement;


 


25.3                        the proposed timetable for
providing the Payment Protection Products and related services in response to
the Material Change or Local Material Change (as the case may be);


 


25.4                        in relation to each relevant
Territory, confirmation that the relevant GEFA Company holds the required
regulatory or other licences to provide the required Payment Protection
Products and related services in response to the Material Change or Local
Material Change (as the case may be) to the relevant GECF Group Company or
Acquired GECF Business or, if the relevant GEFA Company does not hold the
required regulatory or other licences, the proposed steps and timetable for
obtaining such licences;


 


79

















 


25.5                        details of its infrastructure in
the Territory which shall be able to administer and support the Material Change
Business;


 


26                                  Upon receipt of the Material Change
Proposal, GECC or the relevant GECF Company shall assess the Material Change
Proposal according to whether in its reasonable opinion the Material Change
Proposal provides a solution to the Material Change or Local Material Change
(as the case may be) and whether, in its reasonable opinion, the Material
Change Proposal satisfies in all material respects in each relevant Territory
the following criteria:


 


26.1                        the Material Change Proposal covers
all of the Payment Protection Products and related services as notified by GECC
or the relevant GECF Group Company pursuant to clause 20.2.3 or clause 20.4.4;


 


26.2                        the relevant GEFA Company will be
in a position to provide the Payment Protection Products and related services
as notified by GECC or the relevant GECF Group Company pursuant to clause
20.2.3 or clause 20.4.4 in compliance with applicable Service Levels;


 


26.3                        the relevant GEFA Company will be
able to commence provision of the Payment Protection Products and related
services in response to the Material Change or Local Material Change (as the
case may be) within the timetable as notified by GECC or the relevant GECF
Group Company pursuant to clause 20.2.3 or clause 20.4.4;


 


26.4                        the relevant GEFA Company has
obtained or is in the process of obtaining the required regulatory or other
licences to provide the required Payment Protection Products and related
services in response to the Material Change or Local Material Change (as the
case may be) pursuant to paragraph 2.4;


 


27                                  Within 10 Business Days of receipt
of the Material Change Proposal, the relevant GECF Group Company shall give
written notice of its decision to GEFA or the relevant GEFA Company to accept
or reject the Material Change Proposal. If GECC or the relevant GECF Group
Company rejects the Material Change Proposal, it shall provide detailed written
reasons for such rejection. GECC or the relevant GECF Group Company may propose
to accept the Material Change Proposal subject to such amendments as it sees
fit in which case it shall inform GEFA or the relevant GEFA Company in writing
of such amendments together with the reasons for such amendments.


 


28                                  If GECC or the relevant GECF Group
Company rejects the Material Change Proposal or proposes amendments to the
Material Change Proposal:


 


28.1                        GEFA or the relevant GEFA Company
may, within 5 Business Days of the date of the notice of such rejection or
proposed amendments, resubmit an amended proposal in writing (the “Amended Material Change Proposal”); and


 


28.2                        upon receipt of the Amended
Material Change Proposal, GECC or the relevant GECF Group Company shall assess
such Amended Material Change Proposal and 


 


80

















 


shall provide written
notice to GEFA or the relevant GEFA Company of its decision to accept or reject
the Amended Material Change Proposal (in the case of rejection, with detailed
written reasons) within 5 Business Days.


 


29                                  If pursuant to paragraph 4 or 5
above, GECC or the relevant GECF Group Company and GEFA or the relevant GEFA
Group Company agree the terms of the Material Change Proposal (or the Amended
Material Change Proposal), GECC or the relevant GECF Group Company and GEFA or
the relevant GEFA Company shall finalise the terms of the addendum to the
relevant Local Agreement, and the parties shall make available representatives
to finalise such terms.


 


30                                  Once the Local Addendum has been
finalised pursuant to paragraph 6 above, then subject in each relevant
Territory to the relevant GEFA Company having obtained and providing written
evidence to the relevant GECF Group Company that it has obtained the required
regulatory or other licences to provide the required Payment Protection Products
and related services in response to the Material Change or Local Material
Change (as the case may be), the relevant GECF Group Company and the relevant
GEFA Company shall enter into the addendum to the Local Agreement.


 


31                                  If:


 


31.1                        GEFA or the relevant GEFA Company
has not provided the Material Change Proposal to GECC or the relevant GECF
Group Company within the 20 Business Day period in accordance with paragraph 2
above;


 


31.2                        GEFA or the relevant GEFA Company
has not provided the Amended Material Change Proposal to GECC or the relevant
GECF Group Company within the 5 Business Day period in accordance with
paragraph 5.1 above; or


 


31.3                        GECC or the relevant GECF Group
Company has rejected the Amended Material Change Proposal in accordance with
paragraph 5.2 above;


 


31.4                        then paragraph 9 shall apply.


 


27                                  Where this paragraph 9 applies GECC
or the relevant GECF Group Company shall have the right to contact, potential
Replacement Suppliers in each relevant Territory, to agree terms for the
provision of the Payment Protection Products provided by the relevant GEFA
Company as at the date of the notice pursuant to clause 20.2.3 or 21.4.4 (as
the case may be), any such agreements being conditional on the termination of
the relevant Local Agreement.


 


28                                  If GECC or the relevant GECF Group
Company is able to agree such terms with a potential Replacement Supplier in a
Territory it shall ** by the potential Replacement Supplier in all material
respects.


 


29                                  GEFA or the relevant GEFA Company
shall within 20 Business Days of the date of the offer in paragraph 10 accept
or reject the terms of the offer.  In
the event that the offer is accepted, the relevant parties shall promptly agree
an addendum to the relevant Local 


 


81

















 


Agreement which reflects
the terms of the offer and the relevant GEFA Company shall continue to be the
exclusive supplier to the relevant GECF Group Company of Payment Protection
Products in the relevant Territory.  If:


 


29.1                        GEFA or the relevant GEFA Company
rejects the offer; or


 


29.2                        GEFA or the relevant GEFA Company
does not respond within the timescale set out above,


 


paragraph 12 shall apply.


 


30                                  Where this paragraph 12 applies,
GECC or the relevant GECF Group Company shall have the right to terminate this
agreement (in the case of a Material Change) or the relevant Local Agreement
(in the case of a Local Material Change).


 


82

















 


Schedule 6

Part A: Framework Agreement Performance Meetings


 


1                                         Quarterly Performance
Meetings


 


On a quarterly basis, or
as otherwise agreed between the parties, a formal review of the overall
relationship between GECC and GEFA will take place. This will be attended by
the Relationship Managers of GECC and GEFA, GEFA Regional Managers, GECC
Regional Insurance Managers, and further representatives of GEFA and GECC as
appropriate. Key agenda items for the quarterly meeting will include:


 


(a)                                  Profit Share Account - to be
provided by GEFA to GECC in accordance with Schedule 3 and timeframe;


 


(b)                                 Scheme performance including the
Claims Performance Statement to be provided by GEFA to GECC in accordance with
Schedule 4 at least 10 Business days prior to the quarterly meeting;


 


(c)                                  Loss Ratio and action plans to
ensure that the Loss Ratio is maintained at an adequate level in accordance
with Schedule 4;


 


(d)                                 New Payment Protection Product
development and penetration/growth initiatives;


 


(e)                                  Service Credits; and


 


(f)                                    Claims Reserve methodology and
calculation.


 


2                                         Monthly
Performance Meetings


 


On a monthly basis, or as
otherwise agreed between the Parties, a formal review of the overall
relationship between GECC and GEFA will take place. This will be attended by
the Relationship Managers of GECC and GEFA, GEFA Regional Managers, GECC
Regional Insurance Managers, and further representatives of GEFA and GECC
(including finance, risk and operations) as appropriate. Key agenda items for
the monthly meeting will include:


 


(a)                                  Service Levels (to include premium
reconciliation, issues/risk log and escalated items);


 


(b)                                 Service Credits; and


 


(c)                                  Potential New Business
opportunities.


 


83

















 


Part B:
Local Agreement Performance Meetings


 


3                                         Weekly Meetings


 


On a weekly basis, or as
otherwise agreed between the Parties, a formal review will be held in each
Territory. This may take place either by telephone or on a ‘face-to-face’
basis. As a minimum the attendees will include the GEFA Account Manager for the
Territory and the local GECC Insurance Leader.


 


The results of the meeting
will be recorded in a ‘Meeting Log’. All issues/tasks relevant to the country
concerned will be entered into this log and on a weekly basis the position will
be updated. Specific reference will be made to parties responsible for actions
and applicable deadlines.


 


At the end of each week, a
joint communication is to be distributed to appropriate individuals within GECC
and GEFA. This will update progress on key projects.


 


4                                         Monthly Meetings


 


On a monthly basis,  or as otherwise agreed between the
Parties, a formal review will take place for each country on a regional basis.
This will be attended by the GEFA Regional Manager and GECC Regional Insurance
Manager, and will be held in one of the Territories within the region on a
rotation basis. The local GEFA Account Managers and GECC Insurance Leaders will
attend either by telephone or in person depending on the location of the
meeting.


 


Key Agenda Items for this
meeting will include: Service Levels, Scheme Performance by way of Management
Information Reports, New Product Development and Penetration/Growth
Initiatives.


 


84

















 


Schedule 7

Supplemental Sales Commission


 


1                                         From 1st January, 2004, if in
accordance with clause 5.3, the total Gross Written Premium for Existing Direct
Business and Existing Reinsured Business exceeds the Incentive Threshold in a
calendar year then GECC will receive a supplemental sales commission (the
“Supplemental Sales Commission”).  The
Supplemental Sales Commission applies to the element of Existing Direct
Business Gross Written Premium in excess of the Incentive Threshold and  comprises:


 


(a)                                  Additional Sales Commission; and


 


(b)                                 Additional Profit Share.


 


2                                         GEFA shall calculate the Incentive
Threshold in accordance with the following procedure:


 


2.1                               At the end of each calendar month
the Gross Written Premium for Existing Business in each Territory will, subject
to paragraph 2.2 below, be converted to Euro using the exchange rates set out
at Schedule 10.


 


2.2                               The sum total of the 12 months will
be the calendar year total for each Territory, and then the overall total Gross
Written Premium for Existing Business is calculated as:


 


(a)                                  Gross Written Premiums on Existing
Reinsured Business in the calendar year (including GWP in respect of any
Existing Reinsured Business which has been migrated to New Reinsurance
Business); plus


 


(b)                                 Gross Written Premiums on Existing
Direct Business in the calendar year for single premium up-front policies; plus


 


(c)                                  Gross Written Premiums on Existing
Direct Business in the calendar year for monthly premium policies.


 


3                                         If the total Gross Written Premium
for Existing Business is ** than the Incentive Threshold then the Supplemental
Sales Commission is payable on the Existing Direct Business Gross Written
Premium ** of the Incentive Threshold (“Excess”).


 


4                                         The Supplemental Sales Commission
payable to GECC is then determined as:


 


(a)                                  Additional Sales Commission at the
rate of **% of the Excess and shall be reviewed annually by the Parties on the
basis of any change to the mix of Retention Rates in respect of Existing
Business ; and


 


(b)                                 Additional Profit Share at the rate
of **% of the Underwriting Profits relating to the Excess calculated as:


 


85

















 


Underwriting Profits in
the calendar year for all Existing Business ** by the total Gross Earned
Premium for all Existing Business ** by the Gross Earned Premium on the Excess.


 


86

















 


Schedule 8

Local Agreements


 


DENMARK


 


PARTIES: FINANCIAL ASSURANCE COMPANY
LIMITED and FINANCIAL INSURANCE COMPANY LIMITED, acting through their Danish
branches: GE LIVSFORSIKRING and GE SKADESFORSIKRING and GE CAPITAL BANK,
DENMARK, a Danish branch of GE CAPITAL BANK AB.


 


Addendum - 47


 


COMMENCEMENT
DATE
- 1 JANUARY 2001


 


NORWAY


 


PARTIES: FINANCIAL INSURANCE COMPANY
LIMITED and FINANCIAL ASSURANCE COMPANY LIMITED and GE CAPITAL BANK AS.


 


COMMENCEMENT
DATE
- 1 JANUARY 2001


 


SWEDEN


 


PARTIES: FINANCIAL ASSURANCE COMPANY
LIMITED and FINANCIAL INSURANCE COMPANY LIMITED represented by GE Financial
Insurance Sverige and GE CAPITAL BANK AB


 


Addendum - TBC


 


COMMENCEMENT
DATE
- 1 AUGUST 2000


 


UK


 


PARTIES: FINANCIAL ASSURANCE COMPANY
LIMITED and FINANCIAL INSURANCE COMPANY LIMITED and GE CAPITAL BANK LIMITED


 


Addendum - TBC


 


COMMENCEMENT
DATE
- 2000


 


UK AUTO


 


PARTIES: COMBINED LIFE ASSURANCE COMPANY
LIMITED and LONDON GENERAL INSURANCE LIMITED and FINANCIAL ASSURANCE COMPANY
LIMITED and FINANCIAL INSURANCE COMPANY LIMITED (Reinsurance Agreement).
Corresponding Fronting insurance agreement in place with GECC.


 


Addendum - 1


 


87

















 


COMMENCEMENT
DATE
- 1 JANUARY 2000


 


IRELAND


 


PARTIES: COMBINED LIFE ASSURANCE COMPANY OF
EUROPE LIMITED and LONDON GENERAL INSURANCE COMPANY LIMITED and FINANCIAL
ASSURANCE COMPANY LIMITED and FINANCIAL INSURANCE COMPANY LIMITED (Reinsurance
Agreement). Corresponding Fronting insurance agreement in place with GECC.


 


Addendum - 1


 


COMMENCEMENT
DATE
- 1 JANUARY 2000


 


GERMANY


 


PARTIES: COMBINED LIFE ASSURANCE COMPANY
LIMITED and LONDON GENERAL INSURANCE COMPANY LIMITED acting through its German
branch: London General Insurance Company Limited, Niederlassung Deutschland and
FINANCIAL ASSURANCE COMPANY LIMITED and FINANCIAL INSURANCE COMPANY LIMITED
acting through their German branches: Financial Assurance Company Limited,
Lebensversicherung, Niederlassung Deutschland and Financial Insurance Company
Limited, Niederlassung Deutschland. (Reinsurance Agreement). Corresponding
Fronting insurance agreement in place with GECC.


 


Addendum - 6


 


COMMENCEMENT
DATE
- 1 DECEMBER 2000


 


SWITZERLAND


 


PARTIES: GE CAPITAL BANK and FINANCIAL
INSURANCE COMPANY LIMITED


 


Addendum - 5


 


COMMENCEMENT
DATE
- 1 APRIL 2000


 


SPAIN


 


PARTIES: COMBINED LIFE ASSURANCE COMPANY OF
EUROPE LIMITED acting through its Spanish branch: COMBINED LIFE ASSURANCE
COMPANY OF EUROPE, SUCURSAL EN ESPAÑA and LONDON GENERAL INSURANCE COMPANY
LIMITED acting through its Spanish branch: LONDON GENERAL INSURANCE COMPANY
LIMITED, SUCURSAL EN ESPAÑA and GE Financial Assurance, Compañía de Seguros y
Reaseguros de Vida, S.A. and GE Financial Insurance, Compañía de Seguros y
Reaseguros, S.A. (Reinsurance Agreement). Corresponding Fronting insurance
agreement in place with GECC.


 


88

















 


Addendum - TBC


 


COMMENCEMENT
DATE
- 1 JANUARY 2000


 


PORTUGAL


 


PARTIES: COMBINED LIFE ASSURANCE COMPANY
LIMITED and LONDON GENERAL INSURANCE COMPANY LIMITED acting through its
Portuguese Branch: LONDON GENERAL INSURANCE COMPANY LIMITED, SUCURSAL EM
PORTUGAL and Financial Insurance Company Limited (Company No. 1515187) and
Financial Assurance Company Limited, acting through their Portuguese branches:
Financial Insurance Company Limited, C.R.C.L and Financial Assurance Company
Limited. (Reinsurance Agreement). Corresponding Fronting insurance agreement in
place with GECC.


 


Addendum - TBC


 


COMMENCEMENT
DATE
- 1 MAY 2000


 


ITALY


 


PARTIES: Financial Insurance Company
Limited and Financial Assurance Company Limited and GE Capital Servizi
Finanziari S.r.l.


 


Addendum - TBC


 


COMMENCEMENT
DATE
- 1 JULY 2001


 


FRANCE


 


TBC


 


89

















 


Schedule 9

GEFA Group Companies


 


•                                          GEFA International Holdings Inc.


 


•                                          GEFA UK Finance Limited


 


•                                          GEFA UK Holdings Limited


 


•                                          CFI Administrators Limited


 


•                                          Financial Insurance Guernsey PCC
Limited


 


•                                          FIG Ireland Limited


 


•                                          RD Plus SA


 


•                                          Financial Insurance Group Services
Limited


 


•                                          Financial Assurance Company Limited


 


•                                          Financial New Life Company Limited


 


•                                          Consolidated Insurance Group
Limited


 


•                                          Financial Insurance Company Limited


 


•                                          GE Financial Insurance Compania de
Seguros y Reaseguros S.A.


 


•                                          GE
Financial Assurance Compania de Seguros y Reaseguros de vida S.A.


 


•                                          Vie Plus S.A.


 


•                                          UK Group Holding Company Limited


 


•                                          Assocred S.A.


 


90

















 


Schedule 10

EXCHANGE RATES


 


Exchange
rates


 


	
   

  	
   

  	
  Currency

  	
   

  	
  $1=

  	
   

  	
  1 Euro =

  
	
  Existing

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  UK

  	
   

  	
  UKP

  	
   

  	
  0.630

  	
   

  	
  0.720

  
	
  Ireland

  	
   

  	
  EUR

  	
   

  	
  0.876

  	
   

  	
  1.000

  
	
  Germany

  	
   

  	
  EUR

  	
   

  	
  0.876

  	
   

  	
  1.000

  
	
  Spain

  	
   

  	
  EUR

  	
   

  	
  0.876

  	
   

  	
  1.000

  
	
  Portugal

  	
   

  	
  EUR

  	
   

  	
  0.876

  	
   

  	
  1.000

  
	
  Sweden

  	
   

  	
  SEK

  	
   

  	
  8.132

  	
   

  	
  9.287

  
	
  Denmark

  	
   

  	
  DKK

  	
   

  	
  6.525

  	
   

  	
  7.452

  
	
  Norway

  	
   

  	
  NOK

  	
   

  	
  7.334

  	
   

  	
  8.375

  
	
  Switzerland

  	
   

  	
  CHF

  	
   

  	
  1.340

  	
   

  	
  1.530

  
	
  Italy

  	
   

  	
  EUR

  	
   

  	
  0.876

  	
   

  	
  1.000

  
	
  France

  	
   

  	
  EUR

  	
   

  	
  0.876

  	
   

  	
  1.000

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  New

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  **

  	
   

  	
  **

  	
   

  	
  0.876

  	
   

  	
  1.000

  
	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  
	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  
	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  



 


91

















 


Schedule 11

Form of Local Addendum


 


This Addendum is made on [  ] between:


 


(1)                                 [•] whose registered office is at [•] (the “Insurer”); and


 


(2)                                 [•] whose registered office is at [•] (the “GECF Bank”).


 


Recitals


 


(A)                              The Insurer and the GECF Bank are
parties to a Master Agreement dated [•] (as amended) in relation to the
provision of PPI Cover (the “Master Agreement”).


 


(B)                                The Insurer and the GECF Bank wish
to amend the Master Agreement in accordance with the terms of this Addendum.


 


It is agreed as follows:


 


1                                         Interpretation


 


In this Addendum words and expressions
defined in the Master Agreement and the Framework Agreement have the same
meanings herein unless the content otherwise requires or specifically defined
below.


 


2                                         Definitions


 


“Framework
Agreement” means the framework agreement dated [•] between GE Financial Assurance
Holdings Inc. and [GE Consumer Finance].


 


Amendment


 


The parties agree that the terms of the Master
Agreement will be amended in accordance with the provisions of this Addendum
with effect from the date of this Addendum and references in the Master
Agreement to “this Agreement” or
otherwise to the agreement between the parties for the provision of PPI shall
be deemed to be references to the Master Agreement as amended by this Addendum.


 


Provisions
of the Framework Agreement to apply to the Master Agreement


 


The parties agree that the Master Agreement
shall be amended to give effect to the Framework Agreement including the
following clauses:


 


4.1                               clause 2.3;


 


4.2                               clause 3.1 and 3.2 (in respect of
Existing Business, Substitute Business and Potential Substitute Business);


 


4.3                               clause 4;


 


92

















 


4.4                               clause 6.1.1;


 


4.5                               clause 8;


 


4.6                               clause 9.1, 9.2, 9.4 and
Schedule 2;


 


4.7                               clause 10.2;


 


4.8                               clause 11;


 


4.9                               clause 12.1;


 


4.10                        clause 13;


 


4.11                        clause 15;


 


4.12                        clause 16.2 and Schedule 6
Part B;


 


4.13                        clause 17;


 


4.14                        clause 18;


 


4.15                        clause 20.4;


 


4.16                        clause 21.3;


 


4.17                        clause 22;


 


4.18                        clause 23; and


 


4.19                        clause 24.


 


4.20                        In respect of each Local Addendum,
the assignment and subcontracting provisions incorporated by virtue of clause
4.14 above shall be supplemented by the addition of the following sub-clause:


 


4.21                        “Notwithstanding
anything in this Clause [Assignment Clause], all of the rights and obligations
of the Financial Assurance Company Limited under this Agreement shall
automatically transfer to Financial New Life Company Limited upon the transfer
scheme for the transfer of all or substantially all of Financial Assurance
Company Limited’s business to Financial New Life Company Limited pursuant to
section 105 Financial Services and Markets Act 2000 becoming effective
(with such amendments, deletions or additions to the scheme as the parties to
the scheme may approve).”


 


4.22                        GECC and GEFA shall procure that
each Existing Local Agreement shall be amended to delete any provision which
confers on any GECF Group Company which is a party to such Local Agreement any
right to terminate such Local Agreement on a sale or disposal affecting the
whole of or any part of any party to that Local Agreement (in either case,
whether such sale or disposal is effected by way of an asset or business sale
or a share 


 


93

















 


sale or otherwise (including by the sale of a
portfolio or by a change of the identity of the financing provider)).


 


[The parties should
also include further provisions, or amendments to existing provisions, to the
extent required to give effect to Applicable Laws]


 


5                                         Governing Law


 


This Addendum shall be governed by and
construed in all respects in accordance with [English] law.


 


In witness whereof this Addendum has been
entered into on the date stated at the beginning.


 


94

















 


Schedule 12

Form of New Local Agreement


 


Pro forma New Local Agreement to be inserted
to give effect to the following provisions of this agreement:


 


(i)                                     the term of the
New Local Agreement shall be from the date of the New Local Agreement and
expire on [31 December 2008];


 


(ii)                                  clause 3.2;


 


(iii)                               clause 4;


 


(iv)                              clause 5.5 or 5.6 (as
applicable);


 


(v)                                 clause 6.1.2 and
Schedule 3;


 


(vi)                              clause 8;


 


(vii)                           clause 9.1, 9.2, 9.4 and
Schedule 2;


 


(viii)                        clause 10.2;


 


(ix)                                clause 11;


 


(x)                                   clause 12.2;


 


(xi)                                clause 13;


 


(xii)                             clause 15;


 


(xiii)                          clause 16.2 and
Schedule 6 Part B;


 


(xiv)                         clause 17;


 


(xv)                            clause 18;


 


(xvi)                         clause 20.4;


 


(xvii)                      clause 21.3;


 


(xviii)                   clause 22;


 


(xix)                           clause 23; and


 


(xx)                              clause 24.


 


95

















 


(xxi)                           In respect of each New Local
Agreement, the assignment and subcontracting provisions incorporated by virtue
of clause (xv) above shall be supplemented by the addition of the following
sub-clause:


 


(xxii)                        “Notwithstanding anything in
this Clause [Assignment Clause], all of the rights and obligations of the
Financial Assurance Company Limited under this Agreement shall automatically
transfer to Financial New Life Company Limited upon the transfer scheme for the
transfer of all or substantially all of Financial Assurance Company Limited’s
business to Financial New Life Company Limited pursuant to section 105
Financial Services and Markets Act 2000 becoming effective (with such
amendments, deletions or additions to the scheme as the parties to the scheme
may approve).”


 


(xxiii)                     For the avoidance of doubt, no New
Local Agreement shall contain any provision which confers on the GECF Group
Company which is a party to such Local Agreement any right to terminate such
Local Agreement on a sale or disposal affecting the whole of or any part of any
party to that Local Agreement (in either case, whether such sale or disposal is
effected by way of an asset or business sale or a share sale or otherwise (including
by the sale of a portfolio or by a change of the identity of the financing
provider)).


 


[Others].


 


[Please note the pro
forma will need to cater for delay in the provision of PPP by agreed deadlines,
acceptance testing of the relevant GEFA Company’s ability to provide the PPP in
accordance with the Service Levels and the criteria of Schedule 6]


 


96

















 


Schedule 13

APPROVED SUBCONTRACTORS


 


Due Diligence from GECF On
Subcontractors


 


Both Parties acting reasonably shall assess
the responses of the relevant subcontractor to the questions set out in (i) the
Due Diligence Detailed Plan and (ii) the Due Diligence Detailed List below and
shall together determine whether they have satisfied the necessary criteria. If
the Parties cannot agree whether the criteria have been satisfied, then the
matter shall be referred to the dispute resolution procedure in Clause 15.


 


97

















 


GE Consumer Finance


 


•                                          Due Diligence


 


Detailed Plan


 


98

















 


ICT Group
- Due Diligence for GE Consumer Finance


 


Index and
Assigned Responsibilities


 


	
  Page

  	
   

  	
  Area

  	
   

  	
  Owner

  	
   

  	
  Completed

  	
   

  	
  Reviewed

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Pg.

  	
   

  	
  Personnel

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Pg.

  	
   

  	
  Operations

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Pg.

  	
   

  	
  Sales and Marketing

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Pg.

  	
   

  	
  Quality Control

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Pg.

  	
   

  	
  Facilities

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Pg.

  	
   

  	
  Information Systems

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 


Note: Some areas or portions of areas
may not apply to all vendors and /or products.


 


99

















 


Personnel


 


Discuss with appropriate management the
following items:


 


1.                                       Are employees issued badges?                                                                          Are photos included?


 


2.                                       Are visitors issued badges?                                                                                           Logged in?                                                                                    Escorted?


 


3.                                       Are employees restricted to certain
areas of the plant?


 


4.                                       If so, how?


 


5.                                       Are the various work areas
partitioned off?            


 


6.                                       Are background checks made on new
employees?

If so,


 


a)                                      Drug tests: 

b)                                     Credit check: 

c)                                      Criminal history:  

d)                                     Other:


 


Operations


 


Team member should tour a facility and
processing center with company management and determine the following:


 


1.                                       Customer Service


 


a)                                      Hours of operation, # of Shifts, #
of employees:


 


b)                                     Obtain and review the status and
operational reports of customer service levels. These are produced specifically
for a client’s program since desired hours and service levels vary.


 


c)                                      Review of complaint resolution
procedures.


 


d)                                     Cancellation process:


 


e)                                      Customer complaint process:


 


f)                                        A copy of the company disaster
recovery plan is needed: We will forward a copy under separate cover?  Plan in place:                                                Yes 
                       No 
            


 


g)                                     Tenure of CSRs:


 


h)                                     Training:


 


i)                                         Monitoring


 


100

















 


i.                                          Tapes available to observe customer
service:


 


ii.                                       Samples of monitoring
criteria/forms:


 


iii.                                    Review process for evaluating reps:


 


iv.                                   Disciplinary procedure for reps:


 


v.                                      Review process for handling
customer service center complaints:


 


vi.                                   Monitoring standards:


 


2.                                       Describe operations of
subsidiaries/divisions and connections between local, national and headquarter
offices:


 


Sales and Marketing


 


1.                                       Obtain the following information
pertaining to:


 


a)                                      Description, penetration, and
geographical location of served markets. 
Also, describe any seasonal or cyclical aspects of these markets.


 


b)                                     Summary of product offerings
including principal product features such as quality, price design, delivery
channels, install requirements, strengths and weaknesses


 


c)                                      Customer satisfaction results.


 


d)                                     General terms of sales, terms, and
any unusual financing or payment deferral arrangements offered to customers.


 


2.                                       Describe the pricing and
discounting policies.  Have there been
any significant changes in recent years? 
Are their Performance Related Telemarketing Programs in place? If so,
explain.


 


3.                                       Describe the List Control strategy.


 


4.                                       Can there be separation from other
client’s campaign activity?


 


5.                                       For channels used, address the
following:


 


a)                                      Number of campaigns a year


 


b)                                     Capacity to develop and deliver per
day


 


c)                                      Fulfillment of channel


 


d)                                     Quality control procedures for
above


 


101

















 


Telemarketing
(Inbound/Outbound and customer service):


 


a)                                      Turnaround time for script
development, implementation and legal review:


 


b)                                     Sales verification process-
describe/timing:


 


c)                                      Key performance standards (handling
of poor performers):


 


d)                                     Telemarketing Representative
Incentive Plan - describe:


 


e)                                      Telemarketing Reports -  (Daily sales & service level performance,
weekly performance by TSR, Monthly summary analysis, etc.)


 


f)                                        Monitoring process and procedures -
please provide:


 


g)                                     VRU/IVR capabilities (changes &
turnaround time):


 


h)                                     Long distance carriers:


 


i)                                         Call routing capabilities:


 


j)                                         How do you prioritize jobs/clients


 


k)                                      How long do changes take to
implement:


 


l)                                         How do you plan/forecast & how
quickly can you add reps:


 


m)                                   System constraints:


 


Quality Control


 


1.                                       Are any employees assigned solely
to Quality Control?


 


2.                                       Copy of quality control plans for
detailing methodology and process for:


 


a.                                       Marketing (development and
delivery)


 


b.                                      Enrollment –


 


c.                                       Customer Service/Sales
Verification:


 


d.                                      Is quality checked during every
stage of production?


 


3.                                       Copy of management reports utilized
to manage turnaround time of third party service providers.


 


4.                                       Copy of quality control reports and
audits of work provided on all third party providers related to products


 


102

















 


Facilities:


 


1.                                       Type of construction:


 


2.                                       Number of Stories:


 


3.                                       Window Locations:                                                                                                                                       Are they alarmed?


 


4.                                       Only Occupant?                                                                                                                                                                                                         If Not:


 


Describe how Separated
from other Tenants:


 


5.                                       Fire Detection Alarms?


 


6.                                       Automatic Sprinkler System?                                      Yes                         No 
        


 


Flotation Alarms?                                                                                                 Yes                         No 
        


 


Heat Detectors?                                                                                                          Yes                         In IT area
            


 


7.                                       Location of Parking Area:


 


a)                                      Is access controlled by fencing,
gate or guard?


 


8.                                       Entrances: Number and locations of
people doors:


 


i.)                                      Are they double doored (man
traps)?:


 


ii.)                                   Can the exterior or the building,
adjacent to all entrances, be observed from within?

Yes 
                       No 
                         How?


 


iii.)                                Are doors electrically alarmed?                                                         If so, where:  
           


 


iv.)                               Is a receptionist protected from an
armed intruder?                    Yes                         No          


 


How? 


 


b.                                      How many freight doors?


 


i.)                                      Are they double doored (man and/or
truck trap?)


 


ii.)                                   Can the exterior of the building,
adjacent to the freight door be observed from within? 
                                       How?


 


iii.)                                Does a delivery truck have to pass
through a gate or check point before entering premises?
                    
How?                     


 


103

















 


iv.)                               What procedure is followed before a
trucker will be allowed access to plant’s interior.


 


v.)                                  Are doors electrically alarmed? 

To where? 


 


vi.)                               Are loading docks raised above
ground level? 


 


vii.)                            Could a truck gain access to
interior of the building by ramming a door? 


 


9.                                       Does firm utilize more than one
building?


 


10.                                 Is plant owned or leased?


 


Security


 


1.                                       Does the plant have a vault for
secure storage? 

If so,


 


a)                                      Type of construction:


 


b)                                     Size in square feet:


 


c)                                      Type of door:


 


d)                                     Is vault alarmed?                                                                                                      To where?


 


e)                                      Are Tapes and Checks awaiting use
stored there?


 


f)                                        Who has access to vault?


 


g)                                     Is it entered under dual control?


 


h)                                     Is access logged? 


 


i)                                         How often are logs audited & by
whom? 


 


2.                                       Does the plant have a shredder?


 


a)                                      Is waste shredded daily?


 


b)                                     Are precautions taken to ensure all
waste is destroyed?


 


3.                                       Does the plant employ security
guards?


 


If so,


 


a)                                      Are they armed?


 


104

















 


b)                                     How many per shift?


 


c)                                      Are they present when plant is not
in operation?


 


d)                                     Are they company employees or those
from a private guard force?


 


e)                                      Do they have radio contact?


 


f)                                        Is there ever a period when the
plant is unoccupied?


 


4.                                       Are tapes, printouts, etc.,
containing cardholder information kept in secure place?


 


 


 


5.                                       Does plant utilize a log, work
order, audit form or other similar method to account for all products during
the printing and inserting process?


 


If yes, does audit form provide ability to
identify production status of a given piece or account?


 


6.                                       Are employees bonded?


 


Explain process


 


7.                                       Describe the procedure for allowing
employees to enter building when reporting for work


 


 


How would an intruder be detected?


 


8.                                       Are there any precautions taken to
prevent employees from removing Tapes, Checks, or any Cardholder Information
from the premises?


 


Alarm Devices


 


1.                                       Does plant have any electric alarm
alert systems?

If so,


 


a)                                      Is it monitored by a private
security firm?


 


b)                                     Does alarm go directly to local
police departments?


 


c)                                      Distance to local police
department?


 


d)                                     Are all doors alarmed?                                                                                                                         All windows alarmed?


 


e)                                      Does the building have panic or
holdup alarms?


 


If so, where does the signal go? 


 


105

















 


f)                                        Does building have motion
detectors?


 


g)                                     Are heat or smoke detectors
utilized?


 


If so, who monitors?


 


h)                                     Does fire alert go directly to fire
departments?


 


i)                                         Distance to local fire station?


 


j)                                         Are TV cameras utilized?


 


If so, do they cover


 


i.)                                        Parking Lot                                                                          Yes                                                                                    No


ii.)                                     Exterior of Entrance                               Yes                                                                                    No


iii.)                                  Vault                                                                                                           Yes                                                                                    No


iv.)                                 Interior Work Space                            Yes                                                                                    No


v.)                                    Other                                                                                                         Yes                                                                                    No


 


k)                                      In the event of a power outage,
will alarms operate?  Yes
       No      


 


l)                                         Alternate power source is?


 


Does vault have a separate
alarm?


 


Information Systems


 


1.                                       Forms of connectivity:


 


2.                                       Data Processing- Describe the
internal and external handling of the data.


 


3.                                       Schedule of systems
limitations, constraints, expandability and capacity:


 


Backup procedures and
disaster recovery plans:


 


106

















 


	
  Question

  	
   

  	
  Operational Definitions

  	
   

  	
  Answer

  	
   

  	
  Service

  Provider

  Comments

  
	
  General Information

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  The objective of this section is to gather
  general information relating to your business that applies to the products or
  services you may provide to GE Consumer Finance - Americas (GECF)

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1.

  	
   

  	
  What is the name of each company and/or division that may be
  providing products or services for GECF?

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.

  	
   

  	
  Please provide the address of the site(s) from which products or
  services may be provided to GECF?

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3.

  	
   

  	
  What is the name, position & email address of the primary
  contact for GECF?

  	
   

  	
  Primary Contact:  The employee within your business that is
  responsible for managing the relationship between your company & GECF

  	
   

  	
   

  	
   

  	
   

  
	
  4.

  	
   

  	
  The responses in this document must be reviewed
  & approved by an executive within your company.

  	
   

  	
  Executive Level:
  (Company Officer)

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Please list the name, position & email address of the
  Executive, that will be certifying this document (see question 90)

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5.

  	
   

  	
  What are the names, positions & email addresses of the
  privacy & security leaders for your business?

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  All questions below apply to each company
  and/or division that may be providing products or services for GECF.

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  6.

  	
   

  	
  How many employees does your company have?

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7.

  	
   

  	
  Are any of your locations outside the United States?

  	
   

  	
  Examples of a Location: Sales
  offices, warehouses, manufacturing, etc.

  	
   

  	
   

  	
   

  	
   

  
	
  8.

  	
   

  	
  (If yes to question 7) Please
  list all locations outside the United States.

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  9.

  	
   

  	
  What is the name of your parent company, if applicable?

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 


107

















 


	
  Question

  	
   

  	
  Operational Definitions

  	
   

  	
  Answer

  	
   

  	
  Service

  Provider

  Comments

  
	
  Information Security & Privacy

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  The objective of this section is to
  determine how  a 3rd-party provider
  will protect GECF information.

  	
   

  	
  GECF Information:

  •                  Personally
  identifiable consumer information

  •                  Non-public
  customer information

  •                  Intellectual
  property

  •                  Confidential
  GECF business information

  •                  Confidential
  GECF employee data

  	
   

  	
   

  	
   

  	
   

  
	
  10.

  	
   

  	
  Do you provide services to financial institutions?

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  11.

  	
   

  	
  (If yes to question 10) For your financial institution clients,
  does your company have a documented privacy program that supports
  requirements to protect your clients’ customer information?

  	
   

  	
  This question does not assume that your company, itself, is
  subject to state & federal privacy & security regulations. Documented
  Privacy Program:  A documented privacy
  program would include written policies and procedures covering:  (i) ownership of the privacy program; (ii)
  protecting against impermissible sharing of data (i.e., use of information
  for anything other than customer’s approved purposes); (iii) use and
  maintenance of customer information in accordance with privacy and security
  laws;  and (iv) reasonable security
  controls for systems and facilities (including segregation of data, access
  controls).

  	
   

  	
   

  	
   

  	
   

  
	
  12.

  	
   

  	
  Do you have documented policies that limit system access to a
  client’s information to only those resources that require access to service
  that client?

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 


108

















 


	
  Question

  	
   

  	
  Operational Definitions

  	
   

  	
  Answer

  	
   

  	
  Service

  Provider

  Comments

  
	
  13.

  	
   

  	
  Do your existing systems provide tiered system access levels
  that limit access to confidential client information?

  	
   

  	
  Tiered System Access Levels:  Access rights to customer data fields
  generally should include more than 1 level of access.  Depending on the services being performed,
  different users might have read, write/update, and delete access to specific
  data fields.

  	
   

  	
   

  	
   

  	
   

  
	
  14.

  	
   

  	
  Are there documented controls/procedures in place to ensure you
  will not reuse or share restricted GECF information with other parties or use
  for any purpose other than providing the goods or services to GECF?

  	
   

  	
  Documented Controls/Procedures: The
  use of: (1) technology, (2) assignment of job responsibilities, (3)
  deployment of controls and (4) training in items (1)-(3) to ensure systematic
  compliance with the limits on use and disclosure of restricted GECF
  information.

  	
   

  	
   

  	
   

  	
   

  
	
  15.

  	
   

  	
  Can you systematically label / flag GECF information that you
  cannot reuse or share with other parties?

  	
   

  	
  Label / Flag:  System codes, special databases, special
  filing arrangements or other methods to label data with the relevant
  restrictions on use and disclosure

  	
   

  	
   

  	
   

  	
   

  
	
  16.

  	
   

  	
  Do you have a documented security risk assessment process?

  	
   

  	
  Security Risk Assessment Process:  A process to identify threats,
  vulnerabilities, attacks, probabilities of occurrence and outcomes.

  	
   

  	
   

  	
   

  	
   

  



 


109

















 


	
  Question

  	
   

  	
  Operational Definitions

  	
   

  	
  Answer

  	
   

  	
  Service

  Provider

  Comments

  
	
  17.

  	
   

  	
  Do you have a documented security incident management process?

  	
   

  	
  Documented Process:  A set of written instructions on how to
  report a security incident, including who to contact and what information is
  needed. Incident  Management Process:  A process for responding to security
  incidents that includes initial notification methods, escalation procedures,
  client notification, and incident response and investigation. Security
  Incident Examples:

  •                  Facilities
  break-ins

  •                  System
  intrusions

  •                  Theft
  of data

  •                  Internal
  fraud

  	
   

  	
   

  	
   

  	
   

  
	
  Laws, Regulations and Litigation

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  The objective of this section is to
  determine that all 3rd-party providers have a process for identifying &
  complying with legal & regulatory requirements.  (PRIMARY CONTACT MUST CONSULT WITH LEGAL
  COUNSEL IN ANSWERING THESE QUESTIONS)

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  18.

  	
   

  	
  Does your business have a documented process to maintain a
  current list of legal & regulatory requirements that govern the services
  to be provided to GECF?

  	
   

  	
  Examples of requirements:

  •                  Telemarketing
  Laws

  •                  Privacy
  Laws

  •                  Fair
  Practices Acts

  •                  Collections
  Laws

  •                  Truth
  in Advertising

  	
   

  	
   

  	
   

  	
   

  
	
  19.

  	
   

  	
  Does your business have a documented process to communicate
  legal & regulatory updates to all employees, contractors, subcontractors
  and temporary personnel?

  	
   

  	
  Communicate:  Communication can be by one or more of
  several means, including regular training, newsletters, e-mails, etc...

  	
   

  	
   

  	
   

  	
   

  
	
  20.

  	
   

  	
  Is your business required to have a license to provide the
  proposed products or services to GECF?

  	
   

  	
  License:  registration with one or more state regulatory
  agencies, such as a state banking or finance department, to perform customer
  service operations (such as payment processing, collections, customer service
  inquiries).

  	
   

  	
   

  	
   

  	
   

  



 


110

















 


	
  Question

  	
   

  	
  Operational Definitions

  	
   

  	
  Answer

  	
   

  	
  Service

  Provider

  Comments

  
	
  21.

  	
   

  	
  (If yes to question 20) Is
  your company licensed in all necessary jurisdictions to provide the proposed
  products or services to GECF?

  	
   

  	
  All Necessary Jurisdictions:  certain states, including CA, CT, FL, MD,
  RI, require state licenses for certain types of entities to perform certain
  customer service operations

  	
   

  	
   

  	
   

  	
   

  
	
  22.

  	
   

  	
  Is your company currently involved in any pending or threatened
  litigation that could have an adverse impact on the ability to provide
  products or services to GECF or how those service would be provided?

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  23.

  	
   

  	
  Is your company currently involved in any regulatory inquiries
  that could have an adverse impact on the ability to provide products or
  services to GECF or how those products or services would be provided?

  	
   

  	
  Regulatory Inquiries:  Investigations, complaints or inquiries by
  federal or state agencies, including attorney general offices and regulatory
  agencies such as the FTC.

  	
   

  	
   

  	
   

  	
   

  
	
  24.

  	
   

  	
  Does your company have a documented process to proactively
  investigate & monitor intellectual property (IP) rights of technologies
  that your company either owns or uses?

  	
   

  	
  There should be a process by which the service provider can
  meaningfully represent in the contract that it has all necessary rights to
  the intellectual property being used in the provision of products or services
  to GECF.

  	
   

  	
   

  	
   

  	
   

  
	
  25.

  	
   

  	
  Is your company currently involved in any pending or threatened
  intellectual property disputes that could have an adverse impact on the
  ability to provide products or services to GECF or how those products or
  services would be provided?

  	
   

  	
  Pending or Threatened IP Disputes:  Pending litigation or a threat that
  alleges that you do not have the right to use certain intellectual property
  which will be used in the provision of services to GECF.

  	
   

  	
   

  	
   

  	
   

  
	
  26.

  	
   

  	
  Is your company subject to any governmental consent orders,
  consent decrees or enforcement actions?

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Disaster Recovery

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  The objective of this section is to
  determine that all 3rd-party providers have plans in place to mitigate
  service disruptions for all products and services that may be provided to
  GECF.

  	
   

  	
  Service disruption: A
  break in the scheduled delivery of the product or service

  	
   

  	
   

  	
   

  	
   

  



 


111

















 


	
  Question

  	
   

  	
  Operational Definitions

  	
   

  	
  Answer

  	
   

  	
  Service

  Provider

  Comments

  
	
  27.

  	
   

  	
  Do you have a completed & documented disaster recovery plan
  (DRP) in effect that mitigates any potential service disruptions as related
  to products or services that may be provided to GECF?

  	
   

  	
  DRP: Actions taken to mitigate the
  disruption across the entire business that enables a 3rd-party provider to
  deliver products or service to their customers.  (The scope must cover the entire business process across all
  business functions as related to products or services that may be provided to
  GECF.) Completed:  A plan that has been approved by executive
  level management & implemented.

  	
   

  	
   

  	
   

  	
   

  
	
  28.

  	
   

  	
  Is your DRP based on an industry accepted risk assessment
  methodology?

  	
   

  	
  Industry Accepted Risk Assessment: (ISO
  9000, FMEA, Mission Critical Applications)

  	
   

  	
   

  	
   

  	
   

  
	
  29.

  	
   

  	
  Do you electronically store your data related to products or
  services that may be provided to GECF?

  	
   

  	
  Example:
  (Tapes, 3290, Fiche) Your Data:  For questions (27-32) specifically
  references Your
  internal business process data.

  	
   

  	
   

  	
   

  	
   

  
	
  30.

  	
   

  	
  (If yes to question 29) Does
  your DRP include backup & recovery strategies for your data related to
  products or services that may be provided to GECF?

  	
   

  	
  Backup & Recovery Strategies:  Backup & recovery process that supports
  your company’s internal business process.

  	
   

  	
   

  	
   

  	
   

  
	
  31.

  	
   

  	
  (If yes to question 29) Are
  electronic backups of your data stored with a 3rd-Party data storage company?

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  32.

  	
   

  	
  Do you have hard copy files of your data related to products or
  services that may be provided to GECF?

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  33.

  	
   

  	
  (If Yes to question 32) Does
  your DRP include backup & recovery strategies for hard copy files of your
  data related to products or services that may be provided to GECF?

  	
   

  	
  Hard Copy File:  A physical document

  	
   

  	
   

  	
   

  	
   

  
	
  34.

  	
   

  	
  (If yes to question 32) Are
  hard copy files of your data stored with a 3rd-Party data storage company?

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  35.

  	
   

  	
  Will you electronically store GECF information?

  	
   

  	
  Example:
  (Tapes, 3290, Fiche) For questions (33-38) “Will”
  means effective upon engagement as a GECF product or service provider

  	
   

  	
   

  	
   

  	
   

  



 


112

















 


	
  Question

  	
   

  	
  Operational Definitions

  	
   

  	
  Answer

  	
   

  	
  Service

  Provider

  Comments

  
	
  36.

  	
   

  	
  (If yes to question 35) Will
  your DRP include backup & recovery strategies for GECF information?

  	
   

  	
  Backup & Recovery Strategies:  Backup & recovery process that
  supports your company’s internal business process.

  	
   

  	
   

  	
   

  	
   

  
	
  37.

  	
   

  	
  (If yes to question 35) Will
  your electronic backups of GECF information stored with a 3rd-Party data
  storage company?

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  38.

  	
   

  	
  Will you have hard copy files of GECF information?

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  39.

  	
   

  	
  (If yes to question 38) Will
  your DRP include backup & recovery strategies for hard copy files of GECF
  information?

  	
   

  	
  Hard Copy File:  A physical document

  	
   

  	
   

  	
   

  	
   

  
	
  40.

  	
   

  	
  (If yes to question 38) Will
  hard copy files of GECF information be stored with a 3rd-Party data storage
  company?

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  41.

  	
   

  	
  Does your DRP include alternative suppliers that are
  pre-qualified & can promptly be engaged in the event of a service
  disruption?

  	
   

  	
  Alternative Suppliers:
  Suppliers capable of providing similar products or services. Pre-qualified:  Suppliers’ capability already assessed by your company to be
  acceptable

  	
   

  	
   

  	
   

  	
   

  
	
  42.

  	
   

  	
  Does your DRP include redundant systems or processes that can be
  promptly enabled in the event of a service disruption?

  	
   

  	
  Redundant Systems/Processes: a back
  up system/process with capacity and functionality to deliver the product or
  service to GECF, in the absence of the primary system.

  	
   

  	
   

  	
   

  	
   

  
	
  43.

  	
   

  	
  Does your DRP include a communication plan for regular
  communication to your affected customers during a service disruption?

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  44.

  	
   

  	
  Do you have a dedicated resource assigned as the DRP owner?

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  45.

  	
   

  	
  Does the DRP owner report on DRP to an executive level employee
  or executive level committee?

  	
   

  	
  Executive Level:
  reports directly to the President or CEO of your company

  	
   

  	
   

  	
   

  	
   

  
	
  46.

  	
   

  	
  Do you have a documented process as part of your DRP to review
  and update your plan for changes to your business processes?

  	
   

  	
  Documented:
  written document that includes the key requirements for the process, how you
  execute the process and who is the owner of the process.

  	
   

  	
   

  	
   

  	
   

  



 


113

















 


	
  Question

  	
   

  	
  Operational Definitions

  	
   

  	
  Answer

  	
   

  	
  Service

  Provider

  Comments

  
	
  47.

  	
   

  	
  Do you test changes to your DRP?

  	
   

  	
  Test: a simulation of a service
  disruption in which you execute your DRP to meet or exceed you established
  performance criteria.

  	
   

  	
   

  	
   

  	
   

  
	
  48.

  	
   

  	
  If there are no changes to your DRP within a year (12 month
  period), do you test your disaster recovery plans annually?

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Facilities

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  The objective of this section is to
  determine that 3rd-party providers have reasonable measures in place to
  physically secure confidential information.

  	
   

  	
  Reasonable Measures:  Systems & processes that protect access
  to facilities that contain confidential information.

  	
   

  	
   

  	
   

  	
   

  
	
  49.

  	
   

  	
  Do you have a physical facilities security program for all
  locations that will process or house GECF information?

  	
   

  	
  Physical Facilities Security Program:  To includes access control for employees,
  contractors, subcontractors, temporary personnel & visitors

  	
   

  	
   

  	
   

  	
   

  
	
  50.

  	
   

  	
  Does your business use or intend to use subcontractors to
  provide products or services to GECF?

  	
   

  	
  Subcontractors:  a 3rd-party provider that your company has
  engaged to deliver products & services to GECF.

  	
   

  	
   

  	
   

  	
   

  
	
  51.

  	
   

  	
  (If yes to question 50) Do
  your subcontractors have a physical facilities security program for all
  locations that will process or house GECF information?

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  52.

  	
   

  	
  Do you have restricted access to internal data rooms which will
  process or house GECF information?

  	
   

  	
  Data room: Server
  room or hard copy file archive

  	
   

  	
   

  	
   

  	
   

  
	
  53.

  	
   

  	
  Do you have restricted access to phone closets which will
  process or house GECF information?

  	
   

  	
  Phone Closet:  A closet which houses telecommunication
  wiring & telecom wiring equipment (Voice & Data)

  	
   

  	
   

  	
   

  	
   

  
	
  54.

  	
   

  	
  Do you have access control processes which require employees,
  contractors, subcontractors & temporary personnel to physically present
  badges to obtain access to all locations that will process or house GECF
  information?

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 


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  Question

  	
   

  	
  Operational Definitions

  	
   

  	
  Answer

  	
   

  	
  Service

  Provider

  Comments

  
	
  55.

  	
   

  	
  Do you have a visitor access control process?

  	
   

  	
  Visitor:  Anyone who is not an employee, or a
  contractor, subcontractor, temporary resource employed at the site Visitor Access Control Process:  Visitors are escorted in your facilities,
  & a visitor reconciliation process exists

  	
   

  	
   

  	
   

  	
   

  
	
  56.

  	
   

  	
  Is access to your facilities revoked for all terminated
  employees, contractors, subcontractors & temporary personnel within a 48
  hour period?

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  57.

  	
   

  	
  Do you have a documented process to destroy all physical media
  that contains your confidential information & the confidential
  information of your clients after it is no longer actively used or actively
  archived?

  	
   

  	
  Examples of Physical Media:

  •                  Paper

  •                  Tapes

  •                  Fiche

  •                  Embossing
  Foil.....

  Destroy: To
  make unreadable & unusable

  	
   

  	
   

  	
   

  	
   

  
	
  58.

  	
   

  	
  Do you utilize a 3rd-party provider for physical media
  destruction?

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  59.

  	
   

  	
  Do you have a documented process to destroy all electronic media
  that contains your confidential information & the confidential
  information of your clients after it is no longer actively used or actively
  archived?

  	
   

  	
  Examples of Electronic Media:

  •                  Chip
  Sets

  •                  Electronic
  storage devices

  	
   

  	
   

  	
   

  	
   

  
	
  60.

  	
   

  	
  Do you utilize a 3rd-party provider for electronic media
  destruction?

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  61.

  	
   

  	
  Do you audit your 3rd-party providers for electronic &
  physical media destruction?

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Personnel

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  The objective of this section is to determine
  that the 3rd-party provider has appropriate processes & procedures for
  hiring, training & monitoring employees.

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  62.

  	
   

  	
  Are all new hires subject to Federal Criminal background checks
  covering the last 10 years?

  	
   

  	
  New Hires:  All employees, contractors & Temporary
  personnel

  	
   

  	
   

  	
   

  	
   

  
	
  63.

  	
   

  	
  Are all new hires subject to State Criminal background checks
  covering the last 10 years?

  	
   

  	
  State Criminal Background Requirements:  Must be executed for all states &
  counties in which the individual has resided and / or worked

  	
   

  	
   

  	
   

  	
   

  
	
  64.

  	
   

  	
  Are all new hires subject to credit bureau checks?

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 


115

















 


	
  Question

  	
   

  	
  Operational Definitions

  	
   

  	
  Answer

  	
   

  	
  Service

  Provider

  Comments

  
	
  65.

  	
   

  	
  Are all new hires subject to employment verification?

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  66.

  	
   

  	
  Are all new hires subject to education verification?

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  67.

  	
   

  	
  Are all US based new hire employees subject to drug tests?

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  68.

  	
   

  	
  Do you provide services to financial institutions?

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  69.

  	
   

  	
  (If yes to question 68) For
  your financial institution clients, Do you require formal privacy &
  security training for your employees with access to their confidential
  information?

  	
   

  	
  Privacy & Security Training:  Classroom or Computer Based Training
  covering privacy laws & appropriate handling of confidential information

  	
   

  	
   

  	
   

  	
   

  
	
  70.

  	
   

  	
  (If yes to question 68) Do you
  require annual privacy & security training?

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  71.

  	
   

  	
  Will your employees, contractors or temporary personnel directly
  interact with GECF customers?

  	
   

  	
  GECF Customers:
  Cardholders & / or clients of GECF

  	
   

  	
   

  	
   

  	
   

  
	
  72.

  	
   

  	
  (If yes to question 71) Are
  employees, contractors & Temporary personnel who will directly interact
  with GECF customers subject to quality assurance monitoring for compliance
  & service level requirements?

  	
   

  	
  Examples of Monitoring:

  •                  Call
  monitoring

  •                  Mystery
  shopping

  •                  Customer
  satisfaction surveys

  	
   

  	
   

  	
   

  	
   

  
	
  73.

  	
   

  	
  Does your company comply with the Fair Labor Standards Act
  (FLSA) or equivalent Employment standards acts if not based in the US?

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  74.

  	
   

  	
  Does your company have a documented policy & process that
  complies with environmental health & safety regulations

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Subcontracting

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  The objective of this section is to
  determine that the 3rd-party provider has appropriate processes &
  procedures for engaging, training & monitoring contractors,
  subcontractors & temporary personnel.

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  75.

  	
   

  	
  Does your business use or intend to use subcontractors to
  provide products or services to GECF?

  	
   

  	
  Subcontractors:  a 3rd-party provider that your company has
  engaged to deliver products & services to GECF. Note: 
  If the answer to this question is “No”, you may skip to the finance
  section

  	
   

  	
   

  	
   

  	
   

  
	
  76.

  	
   

  	
  (If yes to question 75) Are
  any of your subcontracted service providers on the OFAC list?

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 


116

















 


	
  Question

  	
   

  	
  Operational Definitions

  	
   

  	
  Answer

  	
   

  	
  Service

  Provider

  Comments

  
	
  77.

  	
   

  	
  (If yes to question 75) Do you
  have a documented security incident management process for subcontractors?

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  78.

  	
   

  	
  Will your subcontractors have access to GECF information?

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  79.

  	
   

  	
  (If yes to question 78) Are
  subcontractors who will access to GECF information
  subject to the same background checks as your permanent employees who have
  access to GECF information?

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  80.

  	
   

  	
  (If yes to question 78) Do you
  require formal privacy & security training for contractors,
  subcontractors and temporary personnel who will have access to GECF information?

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  81.

  	
   

  	
  (If yes to question 78) Do you
  require annual privacy & security training?

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  82.

  	
   

  	
  Will GECF information
  be passed to a 3rd-party managed IT system?

  	
   

  	
  3rd-Party Managed IT System:  Database or other technology systems that
  are maintained by a contracted supplier

  	
   

  	
   

  	
   

  	
   

  
	
  83.

  	
   

  	
  (If yes to question 82) Will
  you actively monitor the security of outsourced IT systems?

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  84.

  	
   

  	
  (If yes to question 82) Will
  you actively monitor the transfer, storage & disposal of GECF information?

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  85.

  	
   

  	
  Will your subcontractors directly interact with GECF customers?

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  86.

  	
   

  	
  (If yes to question 85) Are
  subcontractors who will directly interact with GECF customers subject to
  quality assurance monitoring for compliance & service level requirements?

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Finance

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  The objective of this section is to
  determine if there are sound financial practices & controls in place?

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  87.

  	
   

  	
  Does your company prepare stand-alone financial statements?

  	
   

  	
  Stand-Alone:  Separate set of financial statements for
  your division, subsidiary, company or enterprise

  	
   

  	
   

  	
   

  	
   

  
	
  88.

  	
   

  	
  (If yes to question 87)  Have you received an unqualified audit
  opinion letter from your independent accounting firm in each of the last 3
  years?

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 


117

















 


	
  Question

  	
   

  	
  Operational Definitions

  	
   

  	
  Answer

  	
   

  	
  Service

  Provider

  Comments

  
	
  89.

  	
   

  	
  Do you have a parent company?

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  90.

  	
   

  	
  (If yes to question 89) Does
  your parent company prepare stand-alone financial statements?

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  91.

  	
   

  	
  (If yes to question 90)  Have you received an unqualified audit
  opinion letter from your independent accounting firm in each of the last 3
  years?

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  92.

  	
   

  	
  Does either your company or your parent company prepare a SAS70
  or have an independent 3rd-party review of internal controls?

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Certification

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  93.

  	
   

  	
  Are the responses provided in this document accurate &
  complete to the best knowledge of the 3rd-party provider executive (listed
  above), based upon investigation & review with those management
  individuals who have responsibility for the business processes & issues
  evaluated in this questionnaire?

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 


118

















 


Schedule 14

Benchmarking


 


1                                         The first benchmarking exercise
shall be undertaken by an organisation recognised as having benchmarking
capability (the “Benchmarking Adviser”). The following provisions shall apply
in respect of the selection of the Benchmarking Adviser:


 


1.1                               GECC shall identify three potential
candidates to act as the Benchmarking Adviser. GEFA shall then eliminate one of
the three choices and GECC shall choose which of the remaining candidates shall
become the Benchmarking Adviser.


 


2                                         The Parties shall bear the costs of
the first benchmarking exercise in equal shares and GEFA shall bear the costs
of all subsequent benchmarking exercises.


 


3                                         The Benchmarking Adviser shall be
required to submit to the parties the name(s) and curriculum vitae of its personnel
proposed to be deployed on this matter and the estimated costs (which shall be
reasonable). Each Party shall have the right to object to the deployment of
proposed personnel and to require the Benchmarking Adviser to propose (and
submit particulars of) alternative personnel, provided that the reasons for its
objections are reasonable, and are supplied to the other Party and the
Benchmarking Adviser in writing within five Business Days of the parties
receiving the particulars of the personnel. GEFA shall have the right to object
to the estimated costs and to negotiate such costs. The Benchmarking Adviser
shall be required to enter into a confidentiality agreements with GECF and GEFA
on no less onerous terms than those which apply to the Parties under this
agreement.


 


4                                         In order that there are no
ambiguities in relation to each Party’s understanding of how the benchmarking
activity is to be undertaken, its findings interpreted and any resulting
actions taken, the Benchmarking Adviser will be instructed to conduct the
benchmarking activity in accordance with a set of instructions (the “Benchmarking Terms of Reference”). GECC
will prepare the first draft of the Benchmarking Terms of Reference and deliver
it to GEFA. GECC and GEFA shall endeavour to agree the Benchmarking Terms of
Reference (acting reasonably and in good faith). If GECC and GEFA are unable to
agree the Benchmarking Terms of Reference within 10 Business Days of the date
on which the first draft was delivered to GEFA, either party may request the
Benchmarking Adviser to prepare a draft Terms of Reference. Neither party shall
unreasonably withhold or delay its approval of the draft Benchmarking Terms of
Reference prepared by the Benchmarking Adviser. Following agreement of the
Benchmarking Terms of Reference, a representative of each Party shall sign the
Benchmarking Terms of Reference, which shall then be delivered to the
Benchmarking Adviser.


 


5                                         As a minimum, the Benchmarking
Terms of Reference will instruct the Benchmarking Adviser to gather in each
Territory, using generally accepted benchmarking processes, the following
information in respect of at least five members of the Benchmarking Pool (or
where there are not five members of the Benchmarking Pool, then as many as is
reasonably practicable) in the relevant Territory at that time:


 


119

















 


5.1                               types of Payment Protection
Products offered to consumers;


 


5.2                               features of Payment Protection
Products offered to consumers including:


 


(a)                                  marketing channels (including
direct mail, inbound and outbound telemarketing, email and internet campaigns);


 


(b)                                 details of types of cover;


 


(c)                                  details of benefit;


 


(d)                                 consumer price and mechanism for
charging consumer;


 


(e)                                  length of time on the market; and


 


(f)                                    such other information as agreed
between the Parties.


 


5.3                               The Benchmarker shall set out the
information gathered in a report (the “Benchmarking
Report”).


 


6                                         In respect of each six-monthly
benchmarking exercise carried out after the first benchmarking exercise, GEFA
shall gather the information set out in paragraphs 5.1 and 5.2 above. For the
avoidance of doubt, the Benchmarking Adviser shall not be involved in any
Benchmarking Exercise subsequent to the first Benchmarking Exercise. If the
Parties agree to involve the Benchmarking Adviser in a Subsequent Benchmarking
Exercise, the Parties shall bear the costs equally.


 


7                                         The Parties shall, within a
reasonable time, assess, in the light of the information provided in accordance
with paragraph 5 or paragraph 6 as appropriate, whether there are any Payment
Protection Products or features of Payment Protection Products that are offered
by GECF Group Companies’ Competitors to consumers in the relevant Territory but
that the relevant GEFA Company does not offer to the relevant GECF Group
Company.


 


8                                         For the avoidance of doubt the
information specific to GECC in any and all Benchmarking Reports and Product
Development Plans produced under this agreement shall be treated in the same
way as if it were Confidential Information disclosed by a party under the
agreement.


 


9                                         If:


 


9.1                               GECC considers that the information
provided by GEFA in accordance with paragraph 6 does not provide an accurate
view of the market for Payment Protection Products in the relevant Territory;
or


 


9.2                               the Parties are not able to agree
on the assessment carried out under paragraph 7; or


 


120

















 


9.3                               the Parties are not able to agree a
Product Development Plan in accordance with Clause 9.4.4,


 


then Clause 15 of this
agreement shall apply


 


121

















 


Schedule 15

Potential Substitute Business


 


Criteria for determining when Potential
Substitute Business becomes Substitute Business


 


The Parties agree that any substitute Payment
Protection Products which directly replace the Existing Business will be
Substitute Business and will be subject to the existing terms, both the
Retention Rate and Profit Share as set out in Schedule 1 and the Local
Agreements.


 


The Parties agree that the following
scenarios shall fall within or outside the definition of Substitute Business,
as set out below.  This is not an
exhaustive list and any additional scenarios that may arise from time to time
will be agreed between the senior management of GEFA and GECC centrally.


 


Furthermore, if the senior management of GEFA
and GECC centrally agree a Payment Protection Product is partly Substitute
Business and partly New Business, they will agree terms based on a weighted
average of the Existing Business and New Business terms.


 


	
  Scenario

  	
   

  	
  Type of Business

  	
   

  	
  Exceptions

  
	
  Any modification to Existing Business its
  terms, conditions or exclusions whether a minor change is made or a change in
  benefits to meet GECC finance agreements by modification to cover or an
  addition or removal of a cover section or sections.

  	
   

  	
  Is Substitute Business

  	
   

  	
   

  
	
  Resolicitation activity GEFA currently does
  not offer on the back of Existing Business. “Resolicitation”
  means resolicitation activity in the marketing of a Payment Protection Product
  by mail or phone to uninsured GECC finance customers who have not opted to
  purchase the GEFA Payment Protection Product at the point of sale of the
  finance agreement.

  	
   

  	
  Is New Business

  	
   

  	
  If GECC intends to replace the Existing
  Business provided at initial point of sale of the finance agreement with a
  Resolicitation Payment Protection Product it will be Substitute Business and
  GECC will advise GEFA of its intent. If GECC stops actively promoting the
  Existing Business provided at the initial point of sale of the finance
  agreement by means of training or account management or 

  



 


122

















 


	
  Scenario

  	
   

  	
  Type of Business

  	
   

  	
  Exceptions

  
	
   

  	
   

  	
   

  	
   

  	
  incentives or other method which adversely
  impacts on the Existing Business performance, measured by insurance
  penetration of the Existing Business, then any Resolicitation Scheme will be
  restructured as Substitute Business with the appropriate Retention Rate and
  Profit Share terms applied.

  
	
  A joint borrower cover Payment. Protection
  Product where GEFA currently only offers a single cover Payment Protection
  Product.

  	
   

  	
  Is Substitute Business for the first named
  principal borrower. Is New Business for the second named borrower.

  	
   

  	
  As GEFA cannot split terms within one
  Payment Protection Product, aggregate terms will be provided combining the
  proportion of the Risk Rate allocated to the first named principal borrower
  and the second named borrower.

  
	
  New GECC business partnership. This shall
  include new partnerships with retailers, dealers or broker groups.

  	
   

  	
  Is New Business

  	
   

  	
  It is not intended to include individual
  additions of a retailer, dealer or broker which will be provided with terms
  as Substitute Business, unless a separate Scheme is required.

  
	
  A Payment Protection Product offered to an
  age range excluded from Existing Business or other Payment Protection Product
  targeting another specific group of customers not currently provided under
  Existing Business.

  	
   

  	
  Is New Business

  	
   

  	
   

  
	
  Committed Payments Products designed to
  protect in whole or in part GECC finance commitments if they are in
  replacement of Existing Business.

  	
   

  	
  Is Substitute Business

  	
   

  	
   

  



 


123

















 


	
  Scenario

  	
   

  	
  Type of Business

  	
   

  	
  Exceptions

  
	
  Committed Payments Products not designed to
  protect GECC finance commitments.

  	
   

  	
  Is New Business

  	
   

  	
   

  
	
  A Payment Protection Product provided for a
  new and distinct GECC finance activity including any new and distinct loan
  product, which does not replace an existing loan product, offered by GECC.

  	
   

  	
  Is New Business

  	
   

  	
  Any Payment Protection Product provided to
  a new or distinct loan product, which replaces an existing loan product, will
  be Substitute Business.  If the new
  loan product increases the volume of Existing Business’s Gross Written
  Premium then blended terms will be agreed.

  
	
  Acquired GECF Business.

  	
   

  	
  Is New Business

  	
   

  	
  If Existing Business is transferred to the
  Acquired GECF Business, the terms for the Existing Business will remain
  unchanged.

  



 


124

















 


Schedule 16

Business Proposal Pricing Process


 


Part I


 


1                                         Where:


 


1.1                               GECC or any GECF Group Company
request an Offering pursuant to Clause 9.4.4 and such an Offering described in
the relevant Product Development Plan constitutes Potential Substitute
Business; or


 


1.2                               paragraph 9.2 of Part A of
Schedule 5 applies and the Parties need to determine the pricing of a New
Business Proposal or Amended New Business Proposal,


 


the procedure set out in this
Schedule shall apply.


 


2                                         Where the Offering, New Business
Proposal or Amended Business Proposal as appropriate (in any case the “Business Proposal”):


 


2.1                               does not include the establishment
of a new form of distribution channel for the relevant Payment Protection
Product (a “New Channel”), the
process set out in Part II of this Schedule shall apply; or


 


2.2                               does involve a New Channel for the
relevant Payment Protection Product then the process set out in Part III of
this Schedule shall apply.


 


PART II


 


3                                         Where the Business Proposal does
not include a New Channel, GEFA or the relevant GEFA Company will provide GECC
or the relevant GECF Group Company with a pricing proposal for the Business
Proposal. The pricing proposal shall comprise two elements (i) the Retention
Rate as has already been agreed by the Parties for the relevant Payment Protection
Product as set out in Schedule 1 of this agreement (for Potential
Substitute Business) or Clause 5 of this agreement (for Potential New Business)
as the case may be; and (ii) the Risk Rate.


 


4                                         Where GECC or the relevant GECF
Group Company agrees to the pricing proposal, then the Parties shall proceed to
implement the Product Development Plan.


 


5                                         Where GECC or the relevant GECF
Group Company does not agree to the pricing proposal, then the dispute shall be
referred to the dispute resolution process set out in Clauses 15.2 of the
agreement. If the Parties are not able to resolve the dispute within 10
Business Days of the matter being referred to the dispute resolution process
then either Party may refer the pricing proposal to Watson Wyatt or other independent
actuary as agreed by the Parties (the “Actuary”).
The Actuary shall determine the price by calculating the Risk Rate. The Actuary
shall act as an Expert and not as an arbitrator and the Actuary’s decision
shall be final and binding on the parties. The Actuary shall then determine his
own pricing proposal for the Business Proposal. Either Party shall be 


 


125

















 


entitled to receive a copy of the assumptions
upon which the Actuary determined the Risk Rate.


 


6                                         Where the Parties refer the matter
to the Actuary, the price shall be calculated by adding the Risk Rate as
determined by the Actuary to the Retention Rate. Where:


 


6.1                               the Parties agree to the price,
then the Parties will proceed to implement the Business Proposal and (where the
New Business Proposal is a New Business Proposal or Amended Business Proposal)
the terms of Paragraphs 10 and 11 of Part A of Schedule 5 shall apply; or


 


6.2                               GECC or the relevant GECF Company
does not accept the price, then the Product Development Plan will be abandoned;
or


 


6.3                               GEFA or the relevant GEFA Company
does not accept the price, then (i) GECC and the relevant GECF Group Company
shall have no obligation to appoint GEFA or any GEFA Company as its provider,
whether exclusive or otherwise, for the relevant Local Agreement in respect of
the Business Proposal and (ii) GECC shall be free to enter into discussions,
tenders, negotiations, arrangements and agreements with third parties and/or
other companies in the GECF Group in respect of the Business Proposal and (iii)
the relevant GECF Group Company shall not be obliged to invite the relevant
GEFA Company to participate in the tender process but shall provide the
relevant GEFA Company with a copy of the tender documentation.


 


Part III


 


7                                         Where:


 


7.1                               The Business Proposal does include
a New Channel and **.


 


7.2                               Any increase in the Retention Rate
set out in the relevant Local Agreement must **. GEFA shall provide
substantiation for the revised Retention Rate based on a proposed pricing unit
for each premium sold via the New Channel.


 


7.3                               GEFA shall also provide:


 


7.3.1                     (if the New Channel is to be
provided by GEFA or a GEFA Company directly) the benchmarked costings of the
New Channel; or


 


7.3.2                     (if the New Channel is to be provided
by an outsourced supplier) the relevant tender documentation for such
outsourcing.


 


The pricing and capabilities offered by GEFA
must be competitive with the benchmarked or tender costings identified.


 


7.4                               If the pricing and capabilities
offered by GEFA pursuant to paragraph 7.3 are competitive and the Risk Rate is
accepted by GECC, then the Parties shall finalise the terms of the 


 


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addendum to the Local Agreement or, where
relevant, the terms of a New Local Agreement.


 


8                                         Where GECC or the relevant GECF
Group Company does not agree to the proposed revised Retention Rate then the
matter will be referred to the dispute resolution process set out in Clause 15.


 


9                                         Where:


 


9.1                               GECC or the relevant GECF Group
Company agrees to the revised Retention Rate and the Risk Rate proposed by
GEFA, then the Parties shall proceed to implement the Product Development Plan,
or


 


9.2                               GECC or the relevant GECF Group
Company does not agree to the Risk Rate, then the dispute shall be referred to
the dispute resolution process set out in Clause 15.2 of the agreement. If the
Parties are not able to resolve the dispute within 10 Business Days of the
matter being referred to the dispute resolution process then either Party may refer
the dispute to the Actuary. The Actuary shall determine the price by
calculating the Risk Rate. The Actuary shall act as an Expert and not as an
arbitrator and the Actuary’s decision shall be final and binding on the
parties. The Actuary shall then determine his own pricing proposal for the
Business Proposal. Either Party shall be entitled to receive a copy of the
assumptions upon which the Actuary determined the Risk Rate.


 


10                                  Where the Parties refer the matter
to the Actuary, the price shall be calculated by adding the Risk Rate as
determined by the Actuary to the revised Retention Rate.


 


Where:


 


10.1                        the Parties agree to the price,
then the Parties will proceed to implement the Business Proposal and (where the
Business Proposal is a New Business Proposal or Amended Business Proposal) the
terms of Paragraphs 10 and 11 of Part A of Schedule 5 shall apply; or


 


10.2                        GECC or the relevant GECF Company
does not accept the price, then the Product Development Plan will be abandoned;
or


 


10.3                        GEFA or the relevant GEFA Company
does not accept the price, then (i) GECC and the relevant GECF Group Company
shall have no obligation to appoint GEFA or any GEFA Company as its provider,
whether exclusive or otherwise, for the relevant Local Agreement in respect of
the Business Proposal and (ii) GECC and the relevant GECF Group Company shall
be free to enter into discussions, tenders, negotiations, arrangements and
agreements with third parties and/or other companies in the GECF Group in
respect of the Business Proposal and (iii) the relevant GECF Group Company
shall not be obliged to invite the relevant GEFA Company to participate in the
tender process but shall provide the relevant GEFA Company with a copy of the
tender documentation.


 


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