Document:

ex10_61.htm

EXHIBIT 10.6.1

INVESTMENT MANAGEMENT AGREEMENT

THIS SERVICES AGREEMENT (the “Agreement”) is entered into by and between Employers Mutual Casualty Company, an Iowa corporation (hereinafter referred to as “EMCC”), and

Hamilton Mutual Insurance Company, an Iowa corporation ("Hamilton Mutual"); and

EMC Risk Services, LLC, an Iowa limited liability company ("ERS"); and

Union Insurance Company of Providence, an Iowa corporation ("Union"); and

EMC Property & Casualty Company, an Iowa corporation ("EMC P&C"); and

EMC Insurance Group Inc., an Iowa corporation ("Group"); and

EMCASCO Insurance Company, an Iowa corporation ("EMCASCO"); and

Illinois EMCASCO Insurance Company, an Iowa corporation ("Illinois EMCASCO"); and

Dakota Fire Insurance Company, a North Dakota corporation ("Dakota"); and

EMC Reinsurance Company, an Iowa corporation ("EMC Re"); and

EMC Underwriters, LLC, an Iowa limited liability company ("Underwriters")

(collectively all of the companies listed, with the exception of EMCC, shall be referred to as "the Companies").

WHEREAS, EMCC maintains an investment department and an accounting department knowledgeable in the regulatory requirements governing insurance company investments; and

WHEREAS, the Companies believe it to be in their best interests to enter into an agreement with EMCC for the provision of investment management services; and

WHEREAS, EMCC and the Companies each desire that the investment management services of EMCC be made available as needed;

NOW, THEREFORE, in consideration of the mutual promises stated in this Agreement and intending to be legally bound, the parties agree as follows:

 

  

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1.             SERVICES PERFORMED BY EMCC

Upon request by the Companies and acceptance and approval by EMCC, EMCC shall perform those mutually agreed upon investment management services reasonably required to assist the Companies, which may include, but not be limited to:

-           Serving as a centralized point for handling invested assets such as bonds, stocks, short-term investments and certain other invested assets

-           Identifying investments to provide for the funding of liabilities, organizing the custody of those assets and transferring funds to meet operational needs;

-           Establishing and overseeing the activities of external investment managers;

-           Establishing and collateralizing lines of credit;

-           Preparing data for regulatory and rating agencies;

-           Preparing reports for various internal committees of each of the Companies; and

-           Overseeing securities lending activities.

2.             Compensation.       Each of the companies that comprise the Companies shall reimburse EMCC for the cost of their investment management services which will include actual expenses incurred by each company (paid by EMCC) plus an allocation of other investment expenses incurred by EMCC, which is based on a weighted-average of total invested assets and number of investment transactions of each company.  Payments for all said investment management expenses and/or costs shall be due to EMCC no later than forty-five (45) days after the end of each quarter.

3.             Effective Date.  Subject to any necessary regulatory approval, the effective date of this Agreement shall be December 31, 2007.

4.             Term.   The term of this Agreement shall be for a period of one (1) year, and will automatically extend for additional one (1) year terms unless written notice is given by one of the parties at least ninety (90) days prior to the expiration of the then-current one-year term, in accordance with the requirements set out below.

5.             Termination.    Any party may terminate its involvement in this Agreement upon ninety (90) days prior written notice to the other party or parties.  Notwithstanding the foregoing, the parties may agree to a shorter termination period by written agreement signed by the terminating parties.  Any of the individual companies that comprise the Companies may terminate its involvement in this Agreement without causing this entire Agreement to terminate, and EMCC may terminate its agreement with any of the individual companies that comprise the Companies without terminating the entire Agreement.

  

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Any party may terminate this Agreement at any time upon delivery of written notice to the other (i) if the other party applies for or consents to the appointment of a receiver, trustee, or liquidator of all, or a substantial part of, its assets, files a voluntary petition in bankruptcy, admits in writing its inability to pay its debts as they become due, makes a general assignment for the benefit of creditors, files a petition or an answer seeking reorganization or arrangement with creditors or taking advantage of any insolvency law; or (ii) if an order, judgment, or decree is entered by a court of competent jurisdiction adjudicating the other party bankrupt or insolvent, approving a petition seeking reorganization, or appointing a receiver, trustee or liquidator of all or a substantial part of its assets.

In the event of termination by any party for any reason, EMCC shall (i) proceed to transfer all of its responsibilities under this Agreement to the terminating company or the Companies, or any management company designated by the terminating company or the Companies, in an orderly fashion subject to a full and complete accounting, and (ii), if so requested by the terminating company or the Companies, make a good faith effort to find another company to provide the services performed by EMCC for the benefit of the Companies pursuant to this Agreement.

This Agreement shall be binding upon and inure to the benefit of the parties hereto and to the benefit of their respective successors and assigns.

Independent Contractors.  Nothing in this Agreement shall affect the separate identities of the Companies and EMCC.  Except as specifically agreed herein, no party to this Agreement intends to be the partner or agent of the other.  No party intends to limit any other party in any manner in the conduct of its businesses, ventures, or activities not specifically provided for in this Agreement.

Amendments.   This Agreement may be amended at any time by mutual agreement of the parties, provided that any amendment shall be in writing signed by the parties and shall be subject to regulatory approval before it becomes effective.

Indemnity.

The Companies shall indemnify and hold harmless EMCC and will reimburse EMCC for any loss, liability, claim, damage, expense, including cost of investigation and defense and reasonable attorney fees and expenses, sustained or incurred by EMCC arising out of or relating to any breach by the Companies of its duties, obligations, or representations under this Agreement.

EMCC shall indemnify and hold harmless the Companies and will reimburse the Companies for any loss, liability, claim, damage, expense, including cost of investigation and defense and reasonable attorney fees and expenses, sustained or incurred by the Companies arising out of or relating to any breach by EMCC of its duties, obligations, or representations under this Agreement.

Counterparts.  This Agreement may be executed in several counterparts, each of which will be deemed an original and all of which shall constitute but one and the same instrument, but none of which will be deemed to be binding unless and until all parties have signed this Agreement.

  

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the 2nd day of January, 2008, to be effective as of December 31, 2007.

EMPLOYERS MUTUAL CASUALTY COMPANY

	
By:

	
/s/ Bruce G. Kelley

	  
	  	
Bruce G. Kelley

	  
	  	
President and Chief Executive Officer

	  

HAMILTON MUTUAL INSURANCE COMPANY

	
By:

	
/s/ Raymond W. Davis

	  
	  	
Raymond W. Davis

	  
	  	
Senior Vice President - Investments

	  

EMC RISK SERVICES, LLC

	
By:

	
/s/ Jean S. Bloomburg

	  
	  	
Jean S. Bloomburg

	  
	  	
President and Chief Operating Officer

	  

UNION INSURANCE COMPANY OF PROVIDENCE

	
By:

	
/s/ Raymond W. Davis

	  
	  	
Raymond W. Davis

	  
	  	
Senior Vice President and Treasurer

	  

EMC PROPERTY & CASUALTY COMPANY

	
By:

	
Raymond W. Davis

	  
	  	
Raymond W. Davis

	  
	  	
Senior Vice President and Treasurer

	  

 

  

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EMC INSURANCE GROUP INC.

	
By:

	
Raymond W. Davis

	  
	  	
Raymond W. Davis

	  
	  	
Senior Vice President and Treasurer

	  

EMCASCO INSURANCE COMPANY

	
By:

	
Raymond W. Davis

	  
	  	
Raymond W. Davis

	  
	  	
Senior Vice President and Treasurer

	  

ILLINOIS EMCASCO INSURANCE COMPANY

	
By:

	
Raymond W. Davis

	  
	  	
Raymond W. Davis

	  
	  	
Senior Vice President and Treasurer

	  

DAKOTA FIRE INSURANCE COMPANY

	
By:

	
Raymond W. Davis

	  
	  	
Raymond W. Davis

	  
	  	
Senior Vice President - Investments

	  

EMC REINSURANCE COMPANY

	
By:

	
/s/ Ronnie D. Hallenbeck

	  
	  	
Ronnie D. Hallenbeck

	  
	  	
President and Chief Operating Officer

	  

EMC UNDERWRITERS, LLC

	
By:

	
/s/ Daniel C. Crew

	  
	  	
Daniel C. Crew

	  
	  	
President and Chief Operating Officer

	  

 

228ex10_62.htm

EXHIBIT 10.6.2

SERVICES AGREEMENT

THIS SERVICES AGREEMENT (the “Agreement”) is entered into by and between EMC Insurance Group Inc. (“Group”), an Iowa corporation, and Employers Mutual Casualty Company (“EMC”), an Iowa corporation.

WHEREAS, Group is a publicly-held holding company that conducts operations in property and casualty insurance and reinsurance through its subsidiaries; and

WHEREAS, Group believes it is in its own best interests to enter into an agreement with EMC for the provision of certain management, administrative, and operational services; and

WHEREAS, EMC desires to provide certain management, administrative, and operational services to Group; and

WHEREAS, Group and EMC each desire that the management, administrative, and operational services of EMC be made available as needed;

NOW, THEREFORE, in consideration of the mutual promises stated in this Agreement and intending to be legally bound, the parties agree as follows:

	
1

	
SERVICES PERFORMED BY EMC

Upon request by Group and acceptance and approval by EMC, EMC shall perform those mutually agreed upon services reasonably required to assist in the management, administration, and operation of Group, which may include, but not be limited to, the services set out below.  These services shall be performed in accordance with sound management techniques.

	 	
1.1

	
Productivity and Technology. EMC will provide systems and services to Group necessary to provide adequate and appropriate data and processing of data for the support of Group's operations and business.

	
  

	
1.2

	
Marketing.

Providing any marketing activities requested by Group.

	
  

	
1.3

	
Strategic Planning and Operational Services.

Provide such strategic planning and services for the management of the operations of Group as mutually agreed.

 

  

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1.4

	
Legal Services.

Provide or arrange for the provision of such legal services as are necessary to meet the needs of Group.

	
  

	
1.5

	
Property and Equipment.

Provide the property and equipment required by Group to carry out its business.  Title to any property purchased shall be held by EMC.

	
  

	
1.6

	
Administrative Services.  Provide Group with administrative functions requested by Group.

	
  

	
1.7

	
Human Resources.  Group utilizes EMC employees.

 

	
  

	
1.8

	
Financial.  Assist Group with certain financial services, including, but not limited to maintenance of appropriate banking relationships, including the establishment, maintenance, and/or transfer or termination of bank accounts in the name of Group, in accordance with Group authorization.

	
  

	
1.9

	
Insurance and Reinsurance.  Assist Group in obtaining and maintaining general liability insurance, including professional liability insurance, directors and officers liability insurance, reinsurance, and any bonds or other insurance necessary and appropriate.

	 	
1.10

	
Internal Audit.   Develop, maintain, and perform internal audit functions.

	
2

	
Notwithstanding anything in this Agreement to the contrary, EMC shall have no financial responsibility for any cost or expense relating to the operation of Group.

	
3

	
Compensation.  Group shall reimburse EMC for salaries of certain EMC employees based on an annual estimate of the percentage of the time spent working for Group.  Payroll taxes and employee benefits will be allocated based on the prior year ratio of these consolidated expenses to salaries.  Rent for the use of EMC property will be based on square footage of space utilized.  Other expenses such as travel, printing and postage charges will be allocated based upon actual usage.  Payments for all said salaries, expenses and/or costs shall be due to EMC no later than forty-five (45) days after the end of each quarter.

	
4

	
Effective Date.  Subject to any necessary regulatory approval, the effective date of this Agreement shall be December 31, 2007.

	
5

	
Term.  The term of this Agreement shall be for a period of one (1) year, and will automatically extend for additional one (1) year terms unless written notice is given by one of the parties at least ninety (90) days prior to the expiration of the then-current one-year term, in accordance with the requirements set out below.

  

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6

	
Termination.  Either party may terminate this Agreement upon ninety (90) days prior written notice to the other party.  Notwithstanding the foregoing sentence, the parties may agree to a shorter termination period by written agreement signed by both parties.

Either party may terminate this Agreement at any time upon delivery of written notice to the other (i) if the other party applies for or consents to the appointment of a receiver, trustee, or liquidator of all or a substantial part of its assets, files a voluntary petition in bankruptcy, admits in writing its inability to pay its debts as they become due, makes a general assignment for the benefit of creditors, files a petition or an answer seeking reorganization or arrangement with creditors or taking advantage of any insolvency law; or (ii) if an order, judgment, or decree is entered by a court of competent jurisdiction adjudicating the other party bankrupt or insolvent, approving a petition seeking reorganization, or appointing a receiver, trustee or liquidator of all or a substantial part of its assets.

In the event of termination by either party for any reason, EMC shall (i) proceed to transfer all of its responsibilities under this Agreement to Group, or any management company designated by Group, in an orderly fashion subject to a full and complete accounting, and (ii), if so requested by Group, make a good faith effort to find another company to provide the services performed by EMC for the benefit of Group pursuant to this Agreement.

This Agreement shall be binding upon and inure to the benefit of the parties hereto and to the benefit of their respective successors and assigns.

	
7

	
Independent Contractors.  Nothing in this Agreement shall affect the separate identities of Group and EMC.  Except as specifically agreed herein, neither party to this Agreement intends to be the partner or agent of the other.  Neither party intends to limit the other party in any manner in the conduct of its businesses, ventures, or activities not specifically provided for in this Agreement.

	
8

	
Amendments.  This Agreement may be amended at any time by mutual agreement of the parties, provided that any amendment shall be in writing signed by both parties and shall be subject to regulatory approval before it becomes effective.

	
9

	
Indemnity.

Group shall indemnify and hold harmless EMC and will reimburse EMC for any loss, liability, claim, damage, expense, including cost of investigation and defense and reasonable attorney fees and expenses, sustained or incurred by EMC arising out of or relating to any breach by Group of its duties, obligations, or representations under this Agreement.

EMC shall indemnify and hold harmless Group and will reimburse Group for any loss, liability, claim, damage, expense, including cost of investigation and defense and reasonable attorney fees and expenses, sustained or incurred by Group arising out of or relating to any breach by EMC of its duties, obligations, or representations under this Agreement.

 

  

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10

	
Counterparts.  This Agreement may be executed in several counterparts, each of which will be deemed an original and all of which shall constitute but one and the same instrument, but none of which will be deemed to be binding unless and until all parties have signed this Agreement.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the 2nd day of January, 2008, to be effective as of December 31, 2007.

EMPLOYERS MUTUAL CASUALTY COMPANY

	
By:

	
/s/ Bruce G. Kelley

	  
	  	
Bruce G. Kelley

	  
	  	
President and Chief Executive Officer

	  

EMC INSURANCE GROUP INC.

	
By:

	
/s/ William A. Murray

	  
	  	
William A. Murray

	  
	  	
Executive Vice President & Chief Operating Officer

	  

 

 

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