IN ACCORDANCE WITH THE TERMS OF
THE INSURANCE CONTRACTS, (II) IN ACCORDANCE WITH THE APPLICABLE TERMS OF THIS
AGREEMENT, (III) IN COMPLIANCE WITH APPLICABLE LAW AND, SUBJECT TO THE
FOREGOING, (IV) IN THE SAME MANNER AS IT CONDUCTS ITS OWN BUSINESS NOT SUBJECT
TO THIS AGREEMENT AND (V) IN ACCORDANCE WITH THE ADMINISTRATOR'S ADMINISTRATIVE
PERFORMANCE STANDARDS IN EFFECT ON THE DATE HEREOF, WITH SUCH REVISIONS TO SUCH
STANDARDS AS ARE NO LESS FAVORABLE TO THE COMPANY THAN THE ADMINISTRATOR'S
STANDARDS IN EFFECT ON THE DATE HEREOF.
NOTWITHSTANDING THE FOREGOING, THE
PARTIES MAY, FROM TIME TO TIME, MUTUALLY DEVELOP SPECIFIC AND/OR DIFFERENT
STANDARDS FOR PROVIDING SUCH ADMINISTRATIVE SERVICES WITH RESPECT TO THE
INSURANCE CONTRACTS.
SECTION 3.2.
FACILITIES AND PERSONNEL.
THE ADMINISTRATOR SHALL AT
ALL TIMES MAINTAIN SUFFICIENT FACILITIES AND TRAINED PERSONNEL OF THE KIND
NECESSARY TO PERFORM ITS OBLIGATIONS UNDER THIS AGREEMENT IN ACCORDANCE WITH THE
PERFORMANCE STANDARDS SET FORTH HEREIN.
SECTION 3.3.
SUBCONTRACTING.
THE ADMINISTRATOR MAY SUBCONTRACT FOR
THE PERFORMANCE OF ANY ADMINISTRATIVE SERVICE OR SERVICES TO (I) ANY PROPERLY
LICENSED AFFILIATED OR UNAFFILIATED THIRD PARTY ADMINISTRATOR OR (II) ANY
PROPERLY LICENSED AFFILIATE INSURANCE COMPANY OR (III) ANY OTHER PERSON (IN
CONNECTION WITH ACTIVITIES NOT REQUIRING A LICENSE) WITH THE PRIOR WRITTEN
CONSENT OF THE COMPANY, SUCH CONSENT NOT TO BE UNREASONABLY WITHHELD (IN EACH
CASE, THE "SUBCONTRACTOR"); PROVIDED, THAT, NOTWITHSTANDING ANY OTHER PROVISION
OF THIS SECTION 3.3, THE ADMINISTRATOR MAY CONTINUE TO USE ANY SUBCONTRACTOR
UTILIZED BY THE ADMINISTRATOR IN CONNECTION WITH THE INSURANCE CONTRACTS ON THE
EFFECTIVE DATE; AND PROVIDED, FURTHER, THAT NO SUCH SUBCONTRACTING SHALL RELIEVE
THE ADMINISTRATOR FROM ANY OF ITS OBLIGATIONS OR LIABILITIES HEREUNDER, AND THE
ADMINISTRATOR SHALL REMAIN RESPONSIBLE FOR ALL OBLIGATIONS OR LIABILITIES OF
SUCH SUBCONTRACTOR WITH REGARDS TO THE PROVIDING OF SUCH ADMINISTRATIVE SERVICE
OR SERVICES AS IF PROVIDED BY THE ADMINISTRATOR.
SECTION 3.4.
CONSULTATION AND DIRECTION.
FROM TIME TO TIME, AS IS
COMMERCIALLY REASONABLE, THE ADMINISTRATOR MAY SEEK DIRECTION FROM THE COMPANY,
INCLUDING THE COMPANY SERVICE MANAGER, IN CONNECTION WITH THE ADMINISTRATIVE
SERVICES.
THE COMPANY, INCLUDING THE COMPANY SERVICES MANAGER, MAY PROVIDE SUCH
DIRECTION, AT THE COMPANY'S SOLE DISCRETION.
5
ARTICLE IV
CLAIMS HANDLING
The Administrative Services with respect to claims and claims for benefits
including claims outstanding on the Effective Date, shall include the following:
SECTION 4.1.
CLAIM ADMINISTRATION SERVICES.
THE ADMINISTRATOR SHALL
ACKNOWLEDGE, CONSIDER, REVIEW, INVESTIGATE, DENY, SETTLE, PAY OR OTHERWISE
DISPOSE OF EACH CLAIM AND CLAIM FOR BENEFITS REPORTED UNDER EACH INSURANCE
CONTRACT (EACH, A "CLAIM" AND COLLECTIVELY THE "CLAIMS").
SECTION 4.2.
CLAIMS SETTLEMENT ACCOUNT.
(A)
ON THE EFFECTIVE DATE,
THE COMPANY SHALL ESTABLISH A SEPARATE FIDUCIARY BANK ACCOUNT (THE "CLAIMS
SETTLEMENT ACCOUNT") IN ITS OWN NAME FOR THE PAYMENT OF CLAIMS AND SHALL
AUTHORIZE TWO SIGNATORIES WHO SHALL BE EMPLOYED BY THE ADMINISTRATOR AND
APPROVED BY THE COMPANY IN WRITING TO ISSUE CHECKS IN THE NAME OF THE COMPANY.
THE COMPANY SHALL FUND SUCH ACCOUNT FOR PAYMENT OF CLAIMS IN ACCORDANCE WITH THE
PROVISIONS OF SECTION 4.2(B).
THE CLAIMS SETTLEMENT ACCOUNT SHALL BE THE
PROPERTY OF