Document:

exhibit10ct.htm

EXHIBIT 10(ct)

AMERICAN NATIONAL INSURANCE COMPANY

ADMINISTRATIVE SERVICES ONLY AGREEMENT  (ASO)

THIS AGREEMENT IS SUBJECT TO ARBITRATION

	
CONTRACT NUMBER:

	
INSURER:

	  	  
	
ASOGH0002

	
National Western Life Ins. Company

	  	  
	  	  
	
EFFECTIVE DATE:

	
ADDRESS OF INSURER:

	
January 1, 2001

	
850 East Anderson Lane

	  	
Austin, TX     78752-1602

	  	  
	  	  
	
EXPIRATION DATE:

	
ADDRESS OF AMERICAN NATIONAL:

	  	  
	
N/A

	
ONE MOODY PLAZA

	  	
GALVESTON, TX  77550

	  	  

THIS AGREEMENT, effective January 1, 2001, is made and entered into by and between AMERICAN NATIONAL INSURANCE COMPANY (ASO Provider) and NATIONAL WESTERN LIFE INSURANCE CO. (“Insurer”) having its offices at 850 East Anderson Lane, Austin, TX 78752-1602.

PREMISES

WHEREAS, the Insurer has an Insurance Plan that it does not wish to service on its own; and

WHEREAS, the ASO Provider is in the business of providing administrative services in conjunction with such Plans, and the Insurer desires to engage the ASO Provider to perform the services enumerated herein below:

NOW THEREFORE, in consideration of the premises and of the mutual promises and convenants contained herein, the parties agree as follows:

  

Page 1

  

TABLE OF CONTENTS

	
I.  

	
PLAN

 

                1.1              Plan Document

                1.2              Interpretation of Plan

 

	
II.  

	
SCOPE OF RELATIONSHIP

  2.1              Agency

  2.2              Fiduciary

  2.3              Communications

  2.4              Parties

	
III.  

	
DUTIES OF ASO PROVIDER

3.1            Documentation

3.2            Claims Services

     3.2.1              Practices and Procedures

     3.2.2              Services

     3.2.3              Recovery of Payments

3.3            Records and Files

3.4            Reports

3.5            Duty of Care

	
IV.  

	
DUTIES OF INSURER

4.1            Account

 4.1.1              Draft Authority on the Account

4.2            Service Fee

 4.2.1              Change of Administrative Service Fee

4.3            Taxes and Other Assessments

4.4            Census

4.5            Liability for Benefits

4.6            Indemnification

	
V.  

	
GENERAL PROVISIONS

5.1            Entire Contract

5.2            Applicable Law

5.3            Assignment

5.4            Arbitration

	
VI.  

	
TERM OF AGREEMENT

6.1            Term

6.2            Termination

 6.2.1              By Notice

 6.2.2              By Default

 6.2.3              By Law

6.3            Effect of Termination

  

Page 2

  

I.   PLAN

	
1.1

	
PLAN DOCUMENT NO. GH0002.  All services to be provided by the ASO Provider hereunder shall be performed pursuant to the provisions of the Plan Document, as amended.  A copy of the Plan Document and any amendments thereto shall be deemed to form part of this agreement for such purpose.

	
1.2

	
INTERPRETATION OF THE PLAN.  The Insurer shall be the final arbiter as to the interpretation of the Plan and as to the payment of benefits thereunder.  The ASO Provider shall consult with the Insurer in the event extraordinary benefit matters arise.

II.   SCOPE OF RELATIONSHIP

	
2.1

	
AGENCY.  In performing the services hereunder, the ASO Provider is acting solely as the agent of the Insurer; and the respective rights of the parties shall be determined in accordance with the laws of agency.  In the event that the Insurer fails to comply with any federal or state law, the ASO Provider shall not be liable in any action brought with regard to such failure.

	
2.2 

	
FIDUCIARY.  The ASO Provider is not and shall not be deemed to be a fiduciary of the Plan.  Rather, the duties of the ASO Provider hereunder are ministerial in nature; and this Agreement shall not be deemed to confer or delegate any discretionary authority or control of the management of the Plan or of the management or discretion of the assets of the Plan or to confer or delegate any discretionary authority or discretionary responsibility in the administration of the Plan.

	
2.3 

	
COMMUNICATIONS.  The ASO Provider shall be entitled to rely, without question, upon any written or oral communication of the Insurer, and the agents and employees thereof, which are believed by the ASO Provider to be genuine and to have been presented by a person having the apparent authority to do so.

	
2.4 

	
PARTIES.  This agreement is between the ASO Provider and the Insurer, and does not create any rights or legal relationships between the ASO Provider and any of the Participants or Beneficiaries under the Plan.

III   DUTIES OF ASO PROVIDER

	
3.1        

	
DOCUMENTATION. Under this agreement, the Insurer understands that the ASO Provider requires that the Insurance Plan be established and maintained pursuant to a written instrument (plan instrument or trust instrument); and the Insurer agrees that the ASO Provider shall have no responsibility with respect to such instrument or with respect to the preparation or validity of such instrument.

	
3.2        

	
CLAIM SERVICES.  The ASO Provider agrees to perform the below enumerated services with respect to the processing and payment of claims under the Plan:

  

Page 3

  

	
                   3.2.1

	
PRACTICE AND PROCEDURES.  In performing such services, the ASO Provider shall employ its standard practices and procedures, whether written or otherwise; provided, however, such performance shall be subjected to the provisions of this Agreement, including, but not limited to Section 1.2.

	
                   3.2.2 

	
SERVICES.  The ASO Provider agrees to:

	
(a)        

	
provide claim forms to the Insurer for submitting claims to the ASO Provider;

	
(b)        

	
receive claims and claims documentation;

	
(c)        

	
correspond with the Participants and providers of services if additional information is deemed by the ASO Provider to be necessary to complete the processing of claims;

	
(d)        

	
coordinate benefits payable under the Plan with other benefit plans, if any;

	
(e)        

	
determine the amount of benefits payable under the Plan;

	
(f)        

	
pay from the Account (as described in Section 4.1 below) the amount of benefits determined to be payable under the Plan;

	
(g)        

	
provide notice to Participants as to the reason(s) for denial of benefits and provide for the review of denied claims; provided, however, that such review shall be advisory to the Insurer in accordance with Section 1.2 above and shall not be deemed to be an exercise of discretion by the ASO Provider in accordance with Section 2.2 above.

	
                    3.2.3

	
RECOVERY OF PAYMENTS.  In the event payment is made to or on behalf of an ineligible employee Participant or any ineligible dependent of an employee Participant or that a payment is made in excess of the amount properly payable, the ASO Provider shall:

	
(a)        

	
promptly advise the Insurer of such event, and

	
(b)        

	
make a single demand with respect to the Participants in writing for the return of such payment or overpayment and report the results of such effort to the Insurer.

	
3.3

	
RECORDS AND FILES.  The ASO Provider shall establish and maintain a record-keeping system concerning the services to be performed hereunder.  All such records, including an accumulator report, member eligibility listing and computer tapes of such, and all hard copy files shall be the property of the Insurer and shall be delivered to the Insurer upon termination of this Agreement, subject to the right of the ASO Provider to copy and retain all or any of such records as it deems in its interest to do so.  All such records shall be available for inspection by the Insurer or any time during normal business hours at the offices of the ASO Provider in Galveston, Texas, upon reasonable prior notice.

  

Page 4

  

3.4              REPORTS.  The ASO Provider shall provide the following to the Insurer:

	
(a)      

	
Explanation of Benefit forms (as issued);

	
(b)      

	
check register (monthly);

	
(c)      

	
report of claims paid identified as to Participants (monthly);

	
(d)      

	
Statement of Account (monthly);

	
(e)      

	
report of Plan’s operation during the preceding year cost estimates and guidelines for the ensuing year (annually);

	
(f)      

	
input for forms required to be filed by the Insurer under the Plan (annually); and

	
(g)      

	
such other reports as agreed to by the ASO Provider in writing to the Insurer.

	
3.5

	
DUTY OF CARE.  The ASO Provider shall not be liable for any loss resulting from the performance of its duties hereunder, except for losses resulting directly from:

	
(a)      

	
the negligence of the ASO Provider, or

	
(b)      

	
failure of the ASO Provider to follow the written directions of the Insurer in the processing of a particular claim, or

	
(c)      

	
the fraudulent or criminal acts of the agents or employees of the ASO Provider, whether acting alone or in concert with others; except that if such acts shall have been performed in concert with an agent or employee of the Insurer, the Insurer shall bear liability for the resulting loss.

Subject to the above, the defense of any legal action brought by or on behalf of any person, including without limitation, any Participant, Beneficiary, or fiduciary of the Plan, shall be the obligation of the Insurer and shall not be the obligation of the ASO Provider.

IV.   DUTIES OF INSURER

	
4.1 

	
ACCOUNT.  The ASO Provider shall establish, maintain and fund a checking account (“Account”) for the payment by the ASO Provider of benefits under the plan.  The Insurer shall be liable to reimburse the ASO Provider for all claim checks issued by the ASO Provider against the Account.  The ASO Provider agrees to provide, at its own expense, all claim checks for the purpose of issuing benefits for claims on the Account.

	
  

	
4.1.1

	
DRAFT AUTHORITY OF THE ACCOUNT.  The Insurer hereby grants to the ASO Provider authority to draft against the Account.

	
4.2

	
SERVICE FEE.  The Insurer agrees to pay to the ASO Provider an Administrative Service fee equal to 8% of Paid Claims.

	
  

	
The Insurer agrees to pay the Administrative Service fee as determined in Section 4.2 above upon receipt of the report of paid claims for each reporting period.

  

Page 5

  

	
                     4.2.1  

	
CHANGE OF ADMINISTRATIVE SERVICE FEE.  The ASO Provider reserves the right to change the Administrative Service Fee applicable to this Agreement at any time, provided that the then-current Administrative Service Fee has been applicable for a period of twelve consecutive months and provided that written notice of such change is furnished to the Insurer at least thirty-one (31) days prior to the effective date of such change.

	
4.3. 

	
TAXES AND OTHER ASSESSMENTS.  The Insurer will pay the ASO Provider within a reasonable time after assessment, any tax or charge assessed against the ASO Provider which may be incurred by reason of ruling, or other determination by any Insurance Department or other governmental authority, to the effect that any Fees or Charges payable under Section 4.2 or the amount of claim payments made in accordance with the Plan and Section III of this Agreement is an insurance premium and subject to the premium tax provisions of the applicable statutes, including any retroactive assessment.

	
4.4. 

	
CENSUS.  The Insurer agrees to verify the eligibility of Participants and to furnish the ASO Provider such information as may be necessary or required by the ASO Provider from time to time to discharge its obligations under Section 3.4 (f) above.

	
4.5. 

	
LIABILITY FOR BENEFITS.  It is understood and agreed that liability for payment of benefits under the Plan is the liability of the Insurer and the ASO Provider shall not have any duty to use any of its funds for the payment of such benefits.

	
4.6. 

	
INDEMNIFICATION.  Subject to Section 3.5, the Insurer agrees to indemnify and hold harmless the ASO Provider, its agents and employees against any and all liability, damages, expenses and costs including, without limitation, extra contractual damages, court costs, attorney’s fees, and punitive and exemplary damages resulting from or arising out of any claim, demand or legal or administrative proceeding made or brought against the ASO Provider by or on behalf of any person including, without limitation, any Participants, Beneficiary or fiduciary under the Plan.

  

Page 6

  

	
 

	
V.  GENERAL PROVISIONS

	
5.1 

	
ENTIRE CONTRACT.  This agreement, together with any exhibits, attachment, and amendments appended hereto, constitutes the entire Agreement between the parties.  No representations, understandings or agreements which are not expressly contained herein shall be binding or enforceable.  No modification of the terms or provisions of this Agreement shall be effective unless evidenced by a written amendment hereto, signed by an authorized officer of both the Insurer and of the ASO Provider.

	
5.2 

	
APPLICABLE LAW.  This agreement shall be deemed to have been made and entered into in the State of Texas, and shall be construed and enforced according to the laws of the State of Texas.

	
5.3  

	
ASSIGNMENT.  This Agreement shall not be assigned by the ASO Provider nor shall the ASO Provider’s duties, obligations or responsibilities hereunder be delegated to any person or entity without prior written consent of the Insurer.

	
5.4 

	
ARBITRATION.  If any dispute shall arise between the Insurer and the ASO Provider, either before or after termination of this Agreement, with reference to the interpretation of this Agreement or the rights of either party with respect to any transaction under this Agreement, the dispute shall be referred to three arbitrators, one to be chosen by each party and the third by the two so chosen.  If either party refuses or neglects to appoint an arbitrator within thirty days after the receipt of written notice from the other party requesting it to do so, the requesting party may nominate two arbitrators who shall choose the third.  In the event the two arbitrators do not agree on the selection of the third arbitrator within thirty days after both arbitrators have been named, then the third arbitrator shall be selected pursuant to the commercial arbitration rules of the American Arbitration Association.  The arbitration shall take place in the State of Texas, and the arbitration proceedings are to governed by the rules of the American Arbitration Association and the Texas General Arbitration Act.  The arbitrators shall consider this Agreement an honorable engagement rather than merely a legal obligation; they are relieved of all judicial formalities and may abstain from following the strict rules of law.  The decision of a majority of the arbitrators shall be final and binding on both the Insurer and the ASO Provider, and judgement upon the award rendered by the arbitrators shall be entered into any court having jurisdiction thereof.  The expense of the arbitrators and of the arbitration shall be equally divided between the Insurer and the ASO Provider.

  

Page 7

  

IV   TERM OF AGREEMENT

	
6.1

	
TERM.  This Agreement shall commence January 1, 2001, and shall continue in effect unless terminated as provided herein below.

	
6.2

	
TERMINATION.

	
  

	
6.2.1

	
BY NOTICE.  Either party may terminate this Agreement for any reason at any time by providing written notice to the other party.  The notice shall specify an effective date of termination, which shall be not less than 60 days nor more than 90 days after the date of receipt of the notice by the other party.  If the notice does not specify a date of termination the effective date of termination shall be 60 days after receipt of the notice by the other party.

	
  

	
6.2.2

	
BY DEFAULT.  Should either party default in the performance of any of the terms or conditions of this Agreement, the other party shall deliver (personally or by certified mail) to the defaulting party written notice thereof specifying the matters in default.  The defaulting party shall have ten (10) calendar days after its receipt of the written notice to cure such default.  If the defaulting party fails to cure the default within such ten day period, this Agreement shall be terminated at 11:59 p.m. on the tenth day after receipt of the notice by the defaulting party.

	
  

	
6.2.3

	
BY LAW.  If the state or federal law or regulation is enacted or promulgated which prohibits the performance of any of the duties hereunder, or if any law is interpreted to prohibit such performance, this Agreement shall automatically terminate as of the effective date of such prohibition.

	
6.3

	
EFFECT OF TERMINATION.  As of the effective date of termination of this Agreement, the ASO Provider shall have no further duties of performance hereunder.  This period between notice of termination and the effective date of termination shall be used to effect an orderly transfer of records and funds, if any, from the ASO Provider to the Insurer or to such person as the Insurer may designate in writing.

  

Page 8

  

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their respective authorized officers.

	  	  	
BY:           National Western Life Insurance Company

	
ATTEST:

	  	  
	  	  	  
	
/S/ James P. Payne

	  	
/S/ Brian M. Pribyl

	  	  	
Official Signature

	  	  	  
	  	  	
Senior VP

	  	  	
Official Title

	  	  	  
	  	  	
10/2/01

	  	  	
Date

	  	  	  
	  	  	  
	  	  	  
	  	  	
BY: American National Insurance Company

	
ATTEST:

	  	  
	  	  	  
	
/S/ Ron J. Ostermayer

	  	
/S/ Steven H. Schouweilder

	  	  	
Official Signature

	  	  	  
	  	  	
Sr. Vice President, Health Ins.

	  	  	
Official Title

	  	  	  
	  	  	
10/12/01

	  	  	
Date

	  	  	  

 

  

Page 9exhibit10cu.htm

EXHIBIT 10(cu)

PREMIUM PAYMENT AGREEMENT

THIS AGREEMENT, made this 1st day of January, 2001, by and

between NATIONAL WESTERN LIFE INSURANCE COMPANY (Insurer) and

American National Insurance Company (ANICO) provides as follows;

PURPOSE.  This agreement sets forth the terms and conditions for payment of

premiums by ANICO to the Insurer with respect to coverage for

employees of ANICO and their dependents under the Excess Benefit Plan

number GH0002.

TERM.  The initial Term of this Agreement shall be one year from the 1st

day of January, 2001 (Effective Date).  This Agreement may be

renewed annually for subsequent terms of one-year each, subject to the

provisions of the Excess Benefit Plan and this Agreement.  Each such one-year term,

including the first, is referred to in this Agreement as a Benefit Year.

DETERMINATION AND PAYMENT OF PREMIUMS

Payment.  All premiums under this Agreement shall be paid at the Home Office

of the Insurer:  850 East Anderson Lane, Austin, TX  78752-1602.

Reimbursement Premium.  ANICO agrees to pay to the Insurer

Reimbursement Premiums equal to the sum of:

	
1.  

	
The amount of benefits paid under the Excess Benefit Plan; and

	
2.  

	
An amount (Retention Fee) determined by the product of the then applicable 

        Retention Factor, as defined below, and the amount of such paid benefits.

It is understood and agreed that the obligation of ANICO shall be

without regard to when such benefits are paid by the Insurer and shall

continue so long as the Insurer has any obligation to pay such benefits.  It

is further understood and agreed that termination of the Agreement or of the

Excess Benefit Plan shall not act to end ANICO’s liability hereunder.

All such Reimbursement Premiums shall be due as of the date of the monthly

statement of account provided by the Insurer which will include:

	
1.  

	
The amount due, if any; and

	
2.  

	
A listing of each claim paid during the period for which such premiums are billed.

Maximum Annual Aggregate Liability.  Subject to the provisions of the Excess Benefit

Plan, ANICO’s obligation to pay Reimbursement Premiums is limited to 85%

of the Maximum Annual Aggregate Liability amount in such Plan.

Additional Reserve Premium.  The Insurer reserves the right to assess, and

ANICO agrees to pay, additional premiums which are deemed, in the sole

opinion of the Insurer, to be necessary to maintain an adequate Reserve.  The

Insurer may make such assessments at any time while this Excess Benefit Plan

is in force, by providing Notice to ANICO.  All such assessments shall be due as

of the date of such Notice.

NW-1 Agreement                                                              

  

1

  

Renewal Premium.  ANICO agrees to pay to the Insurer Renewal

Premiums in such amounts as may be determined by the Insurer.  It is under-

stood and agreed that the timely payment of such Renewal Premiums shall be a

condition precedent to the renewal of the Excess Benefit Plan for each subsequent

Benefit Year.  The Insurer will provide Notice to ANICO of the amount of

such Renewal Premiums, and all such Renewal Premiums shall be due as of the

date of the Notice.

Grace Period.  The Grace Period of 31 days, as described in the Excess Benefit Plan,

shall apply to all premiums, provided however, that the

Insurer agrees to accept Reimbursement Premiums if paid at the Home Office of

the Insurer on or before 45 days after the date of the monthly statement of

account.  If any such Reimbursement Premium is not paid within this 45 day

period, the Excess Benefit Plan will automatically terminate as of the end of the Grace

Period.

Retention Factor.  The Retention Factor applicable to the initial Benefit Year

of this Agreement is 12.5%, comprising a service fee of 10.0% and

premium tax of 2.5%.  The Insurer reserves the right to change the

Retention Factor applicable to each subsequent Benefit Year by providing

Notice to ANICO.  All such changes shall take effect on the first

day of each such Benefit Year.  If benefits are paid after the effective date

of termination of the Excess Benefit Plan, with respect to claims incurred prior to such

date, the applicable Retention Factor shall be that percentage in effect

immediately prior to such date.

Indemnification.  In addition to any other reimbursement hereunder, ANICO

hereby agrees to reimburse the Insurer for the amount of any

benefits paid under the Excess Benefit Plan as the result of any settlement or judgement

arising from an action at law or in equity against ANICO or the

Insurer.  ANICO further agrees to pay to the Insurer the Retention

Fee applicable at the time such payment is made.  ANICO further

agrees to pay the amount of any penalties and extra-contract, punitive,

exemplary and consequential damages awarded or agreed upon pursuant to any

such settlement or judgement, and all expenses and costs of suit, including

reasonable attorney’s fees.

Any requirements of ANICO that employees insured under the Excess Benefit Plan

shall contribute to the cost of the insurance shall in no way limit the

responsibility of ANICO for the payment of premiums hereunder.

NW-1 Agreement                                                              

  

2

  

Refund of Reserves.  ANICO may elect to receive a full refund of

the amount of the Reserve held for its account at any time after three months

following the date the Excess Benefit Plan terminates, less the amount of any premium

which is due and owing at such time.  Such election shall be in writing on a form

provided by the Insurer for this purpose.  In the event that such election is

made, ANICO expressly agrees that, not withstanding any provision

contained in the Excess Benefit Plan to the contrary, the obligation of the Insurer

to pay benefits under the Excess Benefit Plan shall terminate as of the date such refund is

tendered by the Insurer.  If no such election is made, the Insurer shall be

entitled to retain the entire amount of such Reserve for a period not to

exceed 15 months following the date the Excess Benefit Plan terminates.

GENERAL PROVISIONS

Entire Contract.  This Agreement, together with the Excess Benefit Plan and the

Application of ANICO, forms the Entire Contract between the parties.  No

modification or amendment of any of the above-stated documents shall be

effective or enforceable against the Insurer unless evidenced in writing and

signed by an officer of the Insurer.

Waiver.  The Insurer’s failure to strictly enforce any of the provisions of

this Agreement or the Excess Benefit Plan shall not be construed to be a waiver, and shall

not bar the subsequent enforcement of any such provision regardless of the

number or similarity of prior events not so enforced.

Notice.  Any form of written communication sent by regular mail, postage

prepaid, to the last address of ANICO, according to the records of the Insurer.

Law.  This Agreement shall be construed in accordance with the laws of the

state of delivery.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the

date first written above.  A true and correct copy of this Agreement shall be

as valid as the original.

	
INSURER:  

	
NATIONAL WESTERN LIFE INSURANCE COMPANY

	  	  
	
By:  

	  /S/ Brian M. Pribyl 
	  	  
	
Title:  

	  Senior VP
	  	  
	
ANICO:  

	
AMERICAN NATIONAL INSURANCE COMPANY

	  	  
	
By:  

	  /S/ Glenn C. Langley
	  	  
	
Title:  

	  Senior VP

NW-1 Agreement                                                              

  

3

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