Document:

exv10w66

Exhibit 10.66

MIDDLE MARKET

CLAIMS SERVICE AGREEMENT

Between

LIBERTY MUTUAL INSURANCE COMPANY

AND

PEERLESS INSURANCE COMPANY

Dated:
January 1, 2010

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	Article	 	 	 	 
	ARTICLE I APPOINTMENT; REGULATORY APPROVALS
	 	 	1	 
	Section 1.1 Appointments
	 	 	1	 
	Section 1.2 Regulatory Approvals
	 	 	1	 
	 
	 	 	 	 
	ARTICLE II SERVICES PROVIDED BY AGENCY MARKETS
	 	 	1	 
	 
	 	 	 	 
	ARTICLE III PERFORMANCE ON SERVICES
	 	 	2	 
	 
	 	 	 	 
	ARTICLE IV COMPANY’S RESPONSIBILITIES
	 	 	3	 
	Section 4.1 Duty to Oversee
	 	 	3	 
	 
	 	 	 	 
	ARTICLE V BOOKS AND RECORDS
	 	 	3	 
	Section 5.1 Books and Records Maintained by Agency Markets
	 	 	3	 
	Section 5.2 Property of Liberty Mutual
	 	 	3	 
	 
	 	 	 	 
	ARTICLE VI THE RELATIONSHIP BETWEEN LIBERTY MUTUAL
AND AGENCY MARKETS
	 	 	3	 
	 
	 	 	 	 
	ARTICLE VII SERVICE FEES AND EXPENSES
	 	 	4	 
	Section 7.1 Fees and Expenses
	 	 	4	 
	Section 7.2 Cost Recovery by Agency Markets
	 	 	4	 
	Section 7.3 Accounts and Disbursements
	 	 	4	 
	 
	 	 	 	 
	ARTICLE VIII INDEMNIFICATION
	 	 	4	 
	Section 8.1 Dispute Resolution
	 	 	4	 
	Section 8.2 Indemnification by Agency Markets
	 	 	7	 
	Section 8.3 Indemnification by Liberty Mutual
	 	 	7	 
	Section 8.4 Indemnification Procedure
	 	 	7	 
	Section 8.5 Insurance
	 	 	7	 
	 
	 	 	 	 
	ARTICLE IX TERMINATION
	 	 	7	 
	Section 9.1 Mutual Agreement
	 	 	7	 
	Section 9.2 Termination by Agency Markets
	 	 	7	 
	Section 9.3 Termination by Liberty Mutual
	 	 	7	 
	Section 9.4 Return of Books and Records
	 	 	7	 
	Section 9.5 No Prejudice
	 	 	7	 
	Section 9.6 Transition Period
	 	 	7	 
	 
	 	 	 	 
	ARTICLE X CONFIDENTIALITY
	 	 	8	 
	 
	 	 	 	 
	ARTICLE XI MISCELLANEOUS
	 	 	10	 
	Section 11.1 Assignment
	 	 	10	 
	Section 11.2 Amendments and Waivers
	 	 	10	 

 

 

	 	 	 	 	 
	 	 	 	 	 
	Section 11.3 Entire Agreement
	 	 	10	 
	Section 11.4 Governing Law
	 	 	10	 
	Section 11.5 Notices
	 	 	10	 
	Section 11.6 No Third Party Beneficiaries
	 	 	11	 
	Section 11.7 Counterparts
	 	 	11	 
	Section 11.8 Interpretation
	 	 	12	 
	Section 11.9 Legal Enforceability
	 	 	12	 

 

 

CLAIMS SERVICE AGREEMENT

THIS
CLAIMS SERVICE AGREEMENT, effective as of January 1, 2010 (“Service Agreement”), is
made and entered into by and between Liberty Mutual Insurance Company, a Massachusetts insurance
company with offices at 175 Berkeley Street, Boston, MA 02116, on behalf of itself and its
affiliates when operating as the Middle Market strategic business unit (“Liberty Mutual”) and
Peerless Insurance Company a New Hampshire insurance company with offices at 62 Maple Avenue,
Keene, NH 03431 operating on behalf of itself, its subsidiaries and affiliates as Liberty Mutual
Agency Markets (“Agency Markets”).

WITNESSETH

WHEREAS, Liberty Mutual is a business unit within the Liberty Mutual Group, a group of
insurers and associated companies engaged in the transaction of insurance and other related
enterprises (“Liberty Mutual Group”); and

WHEREAS, Agency Markets is also a member of the Liberty Mutual Group engaged in the
transaction of property and casualty insurance business in the United States; and

WHEREAS, the parties believe it is mutually beneficial to have Agency Markets provide certain
claims adjusting and related services for and on behalf of Liberty Mutual.

NOW, THEREFORE, in consideration of the mutual promises and undertakings hereinafter set forth, the
parties do agree as follows:

ARTICLE I

APPOINTMENT;

REGULATORY APPROVALS

Section 1.1 Appointment. Liberty Mutual hereby appoints Agency Markets as a
non-exclusive contractor to provide Liberty Mutual with the Services (as defined herein), on the
terms and subject to the conditions set forth herein. Agency Markets hereby accepts such
appointment, on such terms and subject to such conditions.

Section 1.2 Regulatory Approvals. It shall be a condition to the effectiveness of
this Service Agreement that Liberty Mutual shall have obtained approval of this Service Agreement
from those state insurance departments or other regulatory authorities, the approval of which is
required for the effectiveness of this Service Agreement.

ARTICLE II

SERVICES PROVIDED BY AGENCY MARKETS

At the direction of the management of Liberty Mutual, Agency Markets shall provide services
requested by Liberty Mutual and agreed to by Agency Markets (the “Services”), including without
limitation:

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(a) Claims Management Services: including (i) receipt, processing, settlement and payment of
claims in the states of Alaska, Idaho, Montana, Oregon and Washington under the policies and
contracts of workers compensation insurance issued by Liberty Mutual pursuant to requests from
Liberty Mutual (the “Portfolio”); (ii) acknowledgement of the receipt of notices received from
policyholders in connection with any claims; (iii) investigation of any claim, as necessary, to
determine its validity and compensability, including verification of coverage and status
information and utilization of any relevant documents and/or information made available to Agency
Markets and advice to the appropriate person of the results of such investigation; (iv)
notification to policyholders of declined claims and the reasons for such declinations; (v)
response to any inquiry, complaint or request received from any policyholder, agent, broker,
regulator or other interested party pertaining to or regarding any such claim, and recordation of
such complaints in complaint logs to be maintained by Agency Markets on Liberty Mutual’s behalf;
(vi) compliance with claims file maintenance, record retention and reconciliation requirements in
conformity with the standards for performance set forth in this Service Agreement or as otherwise
agreed by the parties; (vii) engagement and direction, as necessary, of attorneys, consultants or
other professionals in connection with the processing, defense and handling or any such claims;
(vii) defense of disputed claims; (ix) delivery of notices and other communications to
policyholders; and (x) generally, all such other acts and things as are reasonably necessary or
otherwise required in the administration of all such claims relating to the Portfolio;

(b) Additional Services; Curtailed Services. If Liberty Mutual requires from Agency Markets
additional services that are not otherwise contemplated under this Service Agreement, the parties
shall negotiate in good faith to reach a mutually acceptable arrangement under which such additional services shall be provided by Agency Markets. Such
arrangements shall provide for Liberty Mutual to provide reasonable compensation to Agency Markets
for such additional services. If Liberty Mutual curtails its requirement that Agency Markets
provide certain of the Services that are contemplated under this Service Agreement, the parties
shall negotiate in good faith to reach a mutually acceptable arrangement under which such curtailed
services shall no longer be provided by Agency Markets. Such arrangement shall provide for Liberty
Mutual to no longer provide compensation to Agency Markets for such curtailed services.

ARTICLE III

PERFORMANCE OF SERVICES

Agency Markets shall utilize its employees or employees of its affiliates within the Liberty
Mutual Group to perform the Services; provided, however, that Agency Markets may retain such legal,
financial, actuarial and other advisors and service providers, as Agency Markets reasonably deems
necessary in its reasonable discretion to perform the Services in compliance with the terms and
conditions of this Service Agreement. Agency Markets shall act in good faith, in a commercially
reasonably manner, and in accordance with customary industry standards and applicable laws for the
provision of the Services.

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ARTICLE IV

LIBERTY MUTUAL’S RESPONSIBILITIES

Section 4.1 Duty to Oversee; Ultimate Responsibility; Hold Harmless. All Services
provided by Agency Markets to Liberty Mutual shall be subject to oversight by Liberty Mutual.
Liberty Mutual shall have the right to direct and control the business which is being serviced by
Agency Markets on behalf of Liberty Mutual.

ARTICLE V

BOOKS AND RECORDS

Section 5.1 Books and Records Maintained by Agency Markets; Inspection Rights.
Agency Markets shall maintain and retain for applicable periods, consistent with Liberty
Mutual’s current policies and procedures or as required by law, books and records relating to the
Portfolio and the Services provided hereunder (the “Books and Records”). Liberty Mutual, insurance
regulatory authorities and their respective designated representatives shall have the right to
inspect the Books and Records upon reasonable notice during Agency Markets’ normal business hours.

Section 5.2 Property of Liberty Mutual; Return After Termination; Inspection Rights.
Agency Markets acknowledges and agrees that the Books and Records are and shall remain the
property of Liberty Mutual. Agency Markets shall promptly return the Books and Records to Liberty
Mutual upon the termination of this Service Agreement in accordance with Article 9.4; provided,
however, that in the event that a dispute arises between Liberty Mutual and Agency Markets, Agency
Markets shall have the right at any time after the termination of this Service Agreement and with
reasonable prior notice to inspect the Books and Records returned to Liberty Mutual insofar as the
Books and Records relate to such dispute, and to make copies thereof or extracts therefrom; and
provided, further, that nothing in this Article V shall supersede, preclude or otherwise limit any discovery rights otherwise
available to Agency Markets or Liberty Mutual.

ARTICLE VI

THE RELATIONSHIP BETWEEN LIBERTY MUTUAL AND AGENCY MARKETS

Agency Markets and Liberty Mutual agree that:

(a) Liberty Mutual and Agency Markets are not partners or joint venturers with each other, and
nothing herein shall be construed so as to make them partners or joint venturers with each other,
or to impose any liability as such on either of them. Agency Markets shall perform its duties
hereunder as an independent contractor and not as an employee or agent of Liberty Mutual. Except as
expressly granted in this Service Agreement or otherwise by the other party in writing, or as may
be required by law, or as is necessary to perform the Services to be provided hereunder, no party
shall have any authority, express or implied, to act on behalf of the other party or its
subsidiaries.

(b) Agency Markets shall hold any amounts collected by it with respect to the
Portfolio for the benefit of Liberty Mutual. Funds held in such account shall be remitted to
Liberty Mutual, or

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transferred to a Liberty Mutual account, as directed by Liberty Mutual.

(c) Each party agrees to notify the other party within a reasonable time upon receipt of any
written or oral communication from any state insurance department or
any other government or
regulatory department or agency of such department’s or agency’s intention to proceed with any
administrative action, such as a hearing, fine, license suspension or revocation or similar action,
against Liberty Mutual or Agency Markets, which administrative action relates in any way to Liberty
Mutual’s or Agency Markets’ performance under this Service Agreement or which otherwise relates to
the Portfolio.

(d) In the event that Liberty Mutual or Agency Markets or both are made parties to, or
threatened with, any legal or regulatory proceeding arising out of or in connection with the
Services or the Portfolio, it is agreed that they will promptly notify and cooperate fully with
each other to defend, settle, compromise or otherwise resolve such legal or regulatory proceeding
consistent with the intent of this Service Agreement.

(e) Agency Markets shall reasonably cooperate with Liberty Mutual in connection with the
provision of the Services under this Service Agreement. Notwithstanding anything in this Service
Agreement to the contrary, Liberty Mutual shall retain the ultimate authority to make all decisions
with respect to the Services.

ARTICLE VII

SERVICE FEES AND EXPENSES

Section 7.1 Fees and Expenses. Charges, fees and expenses to be charged by
Agency Markets and paid by Liberty Mutual hereunder for services rendered on the Portfolio until
December 31, 2010 are set forth in “Fee Schedule — 2010” attached. Thereafter successive Fee Schedules will be negotiated and agreed by the parties and attached hereto. Fees for
losses or loss adjustment expense are not included in this Agreement and will be billed directly to
the file.

Section 7.2 Cost Recovery By Agency Markets. Notwithstanding anything herein to
the contrary, Agency Markets shall be entitled to receive from Liberty Mutual, the amount of Agency
Markets’ full actual cost of providing the Services hereunder, and therefore, if the fees charged
do not equal Agency Markets’s full actual cost of providing the Services during the term hereof,
then Liberty Mutual shall pay Agency Markets the amount of such deficiency as an additional fee
hereunder.

Section 7.3 Accounts and Disbursements. Amounts owing between the parties shall
be settled on a quarterly basis and payment of amounts owing shall be made within 45 days after the
end of the calendar quarter.

ARTICLE VIII

DISPUTE RESOLUTION & INDEMNIFICATION

Section 8.1 Dispute Resolution.

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i) Any controversy, claim or dispute arising out of
or relating to this Agreement, or the breach, termination or validity thereof (each, a “Dispute”)
shall be resolved as set forth in this Article VIII.

          (a) Within ten (10) days or as soon as reasonably practicable after any party’s receipt of a
notice of Dispute from the other party setting forth in detail and together with supporting
documentation, if any, the nature and basis of the Dispute (the “Dispute Notice”), to the general
counsel and the chief financial officer of Liberty Mutual and the general counsel and the chief
financial officer of Agency Markets shall meet in person at a mutually acceptable time and place,
and thereafter as often as they reasonably deem necessary, to attempt in good faith to resolve the
Dispute.

          (b) If either the chief financial officer of Liberty Mutual or Agency Markets declares an
impasse then within thirty (30) days after receipt of the Dispute Notice, the respective chief
executive officers of Liberty Mutual or Agency Markets shall meet in person at a mutually
acceptable time and place, and thereafter as often as they reasonably deem necessary, to attempt in
good faith to resolve the Dispute.

          (c) If either the chief executive officer of Liberty Mutual or Agency Markets declares an
impasse no earlier than sixty (60) days after receipt of the Dispute Notice (or such shorter
period, if the parties so agree in writing), then, at the instruction of either party’s chief
executive officer, the Dispute shall be referred to, and finally settled by, confidential and
binding arbitration in accordance with the then-prevailing JAMS Streamlined Arbitration Rules and
Procedures as modified as follows (the “Rules”):

                (i) There shall be three (3) neutral arbitrators of whom each party shall select
one. The claimant shall select its arbitrator in its demand for arbitration and the
respondent shall select its arbitrator within thirty (30) days
after receipt of the
demand for arbitration. The two (2) arbitrators so appointed shall select a third
arbitrator to serve as chairperson within fourteen (14) days of the designation of the
second of the two (2) arbitrators. If any arbitrator is not timely appointed, at the
request of any party such arbitrator shall be appointed by JAMS pursuant to the listing,
striking and ranking procedure in the Rules.

                (ii) Each arbitrator appointed by a party shall be either an attorney with substantial
experience with the property and casualty reinsurance and insurance industry and at least
ten (10) years admission to the bar, or a property and casualty reinsurance and insurance
industry professional of at least ten (10) years standing. The chair of the arbitral
tribunal shall either be a practicing attorney with no less than ten (10) years of practice
and experience as an arbitrator, with, if possible, experience relating to insurance or
reinsurance disputes, or be a retired judge.

5

 

                (iii)The place of arbitration shall be Boston,
Massachusetts, unless some other place is mutually selected by the parties. The
arbitral tribunal shall be required to follow the law of the Commonwealth of
Massachusetts. The decision of the arbitral tribunal shall be final and binding on the
parties and shall be the sole and exclusive remedy between the parties regarding the
matter presented to the arbitral tribunal, including any claims, counterclaims, issues or
accounting presented to the tribunal. Judgment upon the decision may be entered in any
court having jurisdiction. The arbitral tribunal is empowered to award any remedy
provided for under applicable law and the terms of this Agreement, including injunction,
specific performance or other forms of equitable relief. The arbitral tribunal is not
empowered to award damages in excess of compensatory damages. Each party hereby
irrevocably waives any right to recover punitive, exemplary or similar damages with
respect to any Dispute.

                (iv)Any arbitration proceedings, decision or award rendered hereunder and the
validity, effect and interpretation of this arbitration agreement shall be governed by
the Federal Arbitration Act, 9 U.S.C. Section 1 et seq.

          (d) Each party shall bear its own costs in any negotiations pursuant to Section 9(b) or
Section 9(c) and any arbitration, provided that the parties shall share the fees and expenses of
the arbitrators equally as well as any JAMS fees and expenses.

          (e) All negotiations conducted pursuant to Section 9(b) or Section 9(c) shall be confidential
and shall be treated as compromise and settlement negotiations and may not be introduced as
evidence of an admission against interest of either party.

          (f) Notwithstanding the foregoing provisions, either party may seek the
provisional judicial remedy of a preliminary injunction or specific
performance, if in its
reasonable judgment such action is necessary to avoid irreparable harm. Without prejudice to such
provisional remedies as may be available under the jurisdiction of such court, the arbitral
tribunal shall have full authority to grant provisional remedies and to direct the parties to
request that any court modify or vacate any temporary or preliminary relief issued by such court,
and to award damages for the failure of any party to respect the arbitral tribunal’s orders to that
effect.

          (g) The parties hereby submit to the jurisdiction of the courts of the Commonwealth of
Massachusetts located in Boston, Massachusetts, for the purpose of seeking any provisional remedies
as contemplated by Section 9(g). In any such action, suit or proceeding, each of the
parties irrevocably and unconditionally waives, and agrees not to assert by way of motion, as a
defense or otherwise, any claim that the party is not subject to the jurisdiction of the above
courts, that such action or suit is brought in an inconvenient forum or that the venue of such
action, suit or other proceeding is improper. To the fullest extent
permitted by applicable law,

6

 

each of the parties irrevocably waives all rights to trial by jury in any such action, suit
or other proceeding.

Section 8.2 Indemnification by Agency Markets. Notwithstanding anything to the contrary in
this Service Agreement, Agency Markets shall indemnify Liberty Mutual and its directors, officers,
employees and agents against all claims, losses and reasonable costs and expenses (including, but
not limited to, reasonable attorneys’ fees and costs) arising out of any action or inaction taken
or omitted to be taken by Agency Markets or its agents, employees or subcontractors in connection
with its obligations under this Service Agreement; provided, however, under no circumstances shall
Agency Markets be liable or responsible for costs, fees or expenses associated with Portfolio
claims.

Section 8.3 Indemnification by Liberty Mutual. Notwithstanding anything to the contrary in
this Service Agreement, Liberty Mutual shall indemnify Agency Markets and its directors, officers,
employees and agents against all claims, losses and reasonable costs and expenses (including, but
not limited to, reasonable attorneys’ fees and costs) arising out of any action or inaction taken
or omitted to be taken by Liberty Mutual or its agents, employees or subcontractors in connection
with its obligations under this Service Agreement.

Section 8.4 Indemnification Procedure. Any payment to be made under this Article VIII shall be
made within twenty (20) Business Days (as defined herein) of the delivery of notice of an
uncontested claim for indemnification or, in the case of a contested claim, within twenty (20) Business Days of final determination of the amount for which indemnification will
be made hereunder. Any amount not paid within such twenty (20) Business Day period shall bear
simple interest at the 30-Day C.P. Rate from the twentieth (20th) day until the date of
payment. As used in this Service Agreement, the term “Business Day” shall mean any day that is not
a Saturday or Sunday or a day on which the principal place of business of Agency Markets is closed
or a day on which banking institutions in the City of Boston are generally authorized or obligated
by law or executive order to close.

Section 8.5 Insurance. Each party agrees to maintain at its own expense during the term of
this Service Agreement reasonable amounts of the following types of insurance: workers compensation
and employees liability, general liability, business automobile liability, professional liability
and fidelity bonds.

ARTICLE IX

TERMINATION

Section 9.1 Mutual Agreement. This Service Agreement may be terminated by mutual consent of
Liberty Mutual and Agency Markets.

Section 9.2 Termination by Agency Markets. This Service Agreement may be terminated by Agency
Markets:

(a) (i) upon ninety (90) days written notice, or (ii) upon forty-five (45) days written notice
by Agency Markets if (1) Liberty Mutual becomes insolvent or files a voluntary petition in

7

 

bankruptcy, rehabilitation or liquidation, or makes an assignment for the benefit of creditors, or
(2) if a committee of creditors or other representatives is appointed to represent its business or
an involuntary petition in bankruptcy, rehabilitation or liquidation is filed against it, and
Liberty Mutual fails within thirty (30) days following the appointment of such committee or
representative to cause the discharge of such committee or representatives or the dismissal of such
petition, except to the extent that the receiver, liquidator or trustee confirms a part or all
of the services to be provided by Agency Markets under this Service Agreement and continues to make
payment in accordance with Article VII for the services so confirmed; or

(b) upon written notice by Agency Markets if Liberty Mutual fails to make payment of any fees
or expenses in accordance with Article VII and such failure has not been cured within thirty (30)
days after the date such payment was due.

Section 9.3 Termination by Liberty Mutual. This Service Agreement may be
terminated by Liberty Mutual (i) upon ninety (90) days written notice, (ii) upon forty-five (45)
days written notice if (l) Agency Markets becomes insolvent or files a voluntary
petition in bankruptcy or liquidation, or makes an assignment for the benefit of creditors, or (2)
if a committee of creditors or other representatives is appointed to represent its business or any
involuntary petition in bankruptcy or liquidation is filed against it, and Agency Markets files
within thirty (30) days following the appointment of such committee or representative to cause the discharge of such committee or representatives or the dismissal of such petition, or (iii)
Agency Markets materially breaches the terms and conditions of this Service Agreement and such
breach has not been cured within forty-five (45) days following written notice by Liberty Mutual
setting forth the breach.

Section 9.4 Return of Books and Records to Liberty Mutual. In the event of
termination of this Service Agreement by Liberty Mutual, (i) Liberty Mutual shall promptly arrange,
at its sole cost, for the return to Liberty Mutual or transfer to another party of all of the Books
and Records of Liberty Mutual provided to Agency Markets or created in the the provision of the
Services, and (ii) Agency Markets shall cooperate fully with Liberty Mutual in such
return or transfer.

Section 9.5 No Prejudice. The termination of this Service Agreement shall be
without prejudice to any rights or liabilities of any party hereunder which shall have accrued
prior to such termination, and shall not affect any provisions of this Service Agreement that are
expressly or by necessary implication intended to survive such termination.

Section 9.6 Transition Period In the event of termination of this Service
Agreement, Agency Markets shall continue to provide the Services at the then current Fee Schedule
for a period that is reasonably necessary to enable the performance of the Services to be
transferred to another party not to exceed ninety (90) days.

ARTICLE X

CONFIDENTIALITY

(a) As used in this Agreement, the term “Confidential Information” shall mean any and all
information concerning the business, property, operations, policies of insurance, software,
finances, claims information, practices and procedures, policyholder/client data, underwriting

8

 

information, and reinsurance arrangements (including summaries, analyses, studies, or other
compilations of such information) of Liberty Mutual derived in connection with the provision of the
Services by Liberty Mutual, except such information which is or becomes available to the public
other than as a result of disclosure by Agency Markets or the directors, officers, employees,
agents, or representatives of Agency Markets, and shall include not only written information but
also information stored or transferred orally, visually, electronically, or by an other means.

(b) Agency Markets will hold all Confidential Information confidential and will not disclose
any Confidential Information to any party which is not an affiliate, except as may be required to
provide the Services, as authorized in advance by Agency Markets in writing or otherwise, or as may
be required by law, in which case Agency Markets shall promptly provide notice to Agency Markets
that such Confidential Information has been so required by law so that Agency Markets may seek a
protective order or other appropriate remedy. Agency Markets will use its commercially reasonable
best efforts (but without out-of-pocket costs or expenses) to obtain or assist Agency Markets in
obtaining such protective order or other appropriate remedy.

(c) Customer Data. Agency Markets agrees that should Liberty Mutual provide or allow access to
information or identity of persons and entities insured by Liberty Mutual or to whom services are
rendered by Liberty Mutual including non-public personally identifiable information of individuals
and all of this material shall be treated as highly sensitive Confidential Information by Agency
Markets. Agency Markets agrees: (1) to hold such information and/or materials as
Confidential Information hereunder; (2) to use such materials and/or information only to perform
Services on behalf of Liberty Mutual; (3) to delete, destroy, and/or return such material and
information upon completion of the Services rendered to Liberty Mutual. Except for the purposes of
carrying out this Agreement, Agency Markets shall not disclose or use any non-public personally
identifiable information about an insured or claimant provided by Liberty Mutual to Agency Markets.
“Non-public personally identifiable information” is financial or medical information of or
concerning a private person, which has been obtained from sources that are not available to the
general public or obtained from the person who is the subject and may include data elements such as
names and addresses of individuals. Such information shall not be reproduced or shared with any
other party except those entities with which Agency Markets may from time to time contract in
accordance with the fulfillment of the terms of this Agreement and which disclosure shall comply
with all state and federal statutes and regulations governing the disclosure of medical records and
non-public personally identifiable information, including any state or federal laws pertaining to
the confidentiality of medical records. Agency Markets shall promptly adopt and implement security
procedures to protect Liberty Mutual/Claimant Information from improper disclosure or use, such
procedures to be in compliance with all applicable federal and state regulatory requirements and
will immediately notify Liberty Mutual of any breach or suspected breach of data security.

(d) Exclusions. For purposes hereof, “Confidential Information” will not include any
information that the Receiving Party can establish by convincing written evidence: (i) was
independently developed by the Receiving Party without use of or reference to any Confidential
Information belonging to the Disclosing Party; (ii) was acquired by the Receiving Party from a
third party having the legal right to furnish same to the Receiving Party; or (iii) was at the time
in

9

 

question (whether at disclosure or thereafter) generally known by or available to the
public (through no fault of the Receiving Party).

(e) Required Disclosures. These confidentiality obligations will not restrict any disclosure
required by order of a court or any government agency, provided that the Receiving Party gives
prompt notice to the Disclosing Party of any such order and reasonably cooperates with the
Disclosing Party at the Disclosing Party’s request and expense to resist such order or to obtain a
protective order.

ARTICLE XI

MISCELLANEOUS

Section 11.1 Assignment. None of the parties hereto shall assign or transfer or
permit the assignment or transfer of this Service Agreement without the prior written consent of
the other, which consent shall not be unreasonably withheld. All such assignments shall be subject
to all necessary regulatory approvals.

Section 11.2 Amendments and Waivers. This Service Agreement may not be amended,
and none of its provisions may be modified, except expressly by a written instrument signed by the
parties hereto. No failure or delay of a party in exercising any power or right hereunder shall
operate as a waiver thereof, nor shall any single or partial exercise of any such right or power,
or any abandonment or discontinuance of steps to enforce such a right or power, preclude any other
or further exercise thereof or the exercise of any other right or power. No waiver by a party of
any provision of this Service Agreement or consent to any departure therefrom shall in any event be
effective unless the same shall be in writing and signed by such party, and then such
waiver or consent shall be effective only in the specific instance and for the specific purpose for
which it is given.

Section 11.3 Entire Agreement. This Service Agreement constitutes the entire
agreement among the parties with respect to the subject matter hereof and supersedes all other
prior negotiations, commitments, agreements, and understandings, both written and oral, between the
parties or any of them with respect to the subject matter hereof.

Section 11.4 Governing Law. This Service Agreement shall be deemed to have been
made under and governed by the laws of the Commonwealth of Massachusetts, except for the portion of
such laws having to do with conflicts of law.

Section 11.5 Notices. All notices and other communications under this Service
Agreement shall be in writing and shall be delivered personally, or
sent by confirmed facsimile
transmission or nationally recognized overnight delivery service. Any such notice or other
communication shall be deemed given upon actual delivery in each case to the following addresses:

(a) If to Liberty Mutual to:

Sandra Thibault

Financial Officer

10

 

Liberty Mutual, Middle Markets

Liberty Mutual Group

175 Berkeley Street

Boston, MA 02116-5066

     With a copy to:

Stan Hiers, Counsel

Liberty Mutual, Commercial Markets

Liberty Mutual Group

175 Berkeley Street

Boston, MA 02116-5066

(b) If to Agency Markets to:

Michael J. Fallon, Chief Financial Officer

Liberty Mutual Agency Markets

Liberty Mutual Group

175 Berkeley Street

Boston, MA 02116-5066

     With a copy to:

Edmund Kenealy, Vice President and General Counsel

Liberty Mutual Agency Markets

Liberty Mutual Group

175 Berkeley Street

Boston, MA 02116-5066

Section 11.6 No Third Party Beneficiaries. Nothing in this Service Agreement is intended to
confer any rights or remedies under or by reason of this Service Agreement on any parties other
than Liberty Mutual, Agency Markets, a party entitled to identification under Article IX and their
respective heirs, executors, successors, and assignees. Nothing in this Service Agreement is
intended to relieve or discharge the obligations or liability of any third parties to Liberty
Mutual or Agency Markets. No provision of this Service Agreement shall give any third parties any
right of subrogation or action over or against Liberty Mutual or Agency Markets.

Section 11.7 Counterparts. This Service Agreement may be executed in two or more counterparts,
each of which shall be deemed to be original, but all of which shall constitute one and the same
instrument.

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Section 11.8 Interpretation. The descriptive headings are inserted for
convenience of reference only and are not intended to be part of, or to affect the meaning or
interpretation of this Service Agreement.

Section 11.9 Legal Enforceability. Any term or provision of this Service Agreement
which is invalid or unenforceable in any jurisdiction shall, as to that jurisdiction, be
ineffective to the extent of such invalidity or unenforceability without rendering invalid or
unenforceable the remaining terms and provisions of this Service Agreement or affecting the
validity or enforceability of any of the terms or provisions of this Service Agreement in any other
jurisdiction. If any provision of this Agreement is so broad as to be unenforceable,
that provision shall be interpreted to be only so broad as is enforceable.

IN WITNESS WHEREOF, this Service Agreement has been duly executed.

	 	 	 	 	 

	LIBERTY MUTUAL INSURANCE COMPANY	 	 
	 
	 	 	 	 
	By:

	 	/s/ George Doonan
	 	 
	 

	 	 	 	 
	Name:

	 	George Doonan	 	 
	Title:

	 	Chief Financial Officer, Commercial Markets	 	 
	 
	 	 	 	 
	PEERLESS INSURANCE COMPANY	 	 
	By:

	 	/s/ Michael J. Fallon	 	 
	 

	 	 	 	 
	Name:

	 	Michael J. Fallon	 	 
	Title:

	 	Chief Financial Officer	 	 

12

 

Fee Schedule -2010

Service Fees payable by Liberty Mutual to Agency Markets for the service period
December 31, 2009 to December 31, 2010 are set forth below. Amounts payable hereunder will be direct
charges between the parties.

	 	 	 	 	 
	 	 	Middle
	 	 	Markets
	Fee Based on Projected
Number of New Claims
Reported in 2010

	 	$	1,331,692	 
	 
	 	 	 	 

If the aggregate number of new Liberty Mutual claims actually reported to Agency Markets
pursuant to this Agreement is greater than 105% of the number of new claims projected for 2010,
Liberty Mutual will pay the reconciliation rate per claim shown below for each claim in excess of
105% of the number of new claims projected for 2010:

Indemnity Claims: $721

Medical Only Claims: $168

If the aggregate number of new Liberty Mutual claims actually reported to Agency Markets
pursuant to this Agreement is less than 95% of the number of new claims projected for 2010, Agency
Markets will refund the reconciliation rate per claim shown below for the difference between the
number of claims actually reported and 95% of the number of new claims projected for 2010:

Indemnity Claims: $721

Medical Only Claims: $168

13exv10w67

EXHIBIT 10.67

NATIONAL MARKET

CLAIMS SERVICE AGREEMENT

Between

LIBERTY MUTUAL INSURANCE COMPANY,

HELMSMAN MANAGEMENT SERVICES LLC

AND

PEERLESS INSURANCE COMPANY

Dated:
January 1, 2010

 

 

TABLE OF CONTENTS

	 	 	 	 	 

	Article
	 	 	 	 
	ARTICLE I APPOINTMENT; REGULATORY APPROVALS 
	 	 	1	 
	Section 1.1 Appointments 
	 	 	1	 
	Section 1.2 Regulatory Approvals 
	 	 	1	 
	 
	 	 	 	 
	ARTICLE II SERVICES PROVIDED BY AGENCY MARKETS 
	 	 	1	 
	 
	 	 	 	 
	ARTICLE III PERFORMANCE ON SERVICES 
	 	 	2	 
	 
	 	 	 	 
	ARTICLE IV COMPANY’S RESPONSIBILITIES 
	 	 	3	 
	Section 4.1 Duty to Oversee 
	 	 	3	 
	 
	 	 	 	 
	ARTICLE V BOOKS AND RECORDS 
	 	 	3	 
	Section 5.1 Books and Records Maintained by Agency Markets 
	 	 	3	 
	Section 5.2 Property of Liberty Mutual 
	 	 	3	 
	 
	 	 	 	 
	ARTICLE VI THE RELATIONSHIP BETWEEN LIBERTY MUTUAL
AND AGENCY MARKETS 
	 	 	3	 
	 
	 	 	 	 
	ARTICLE VII SERVICE FEES AND EXPENSES 
	 	 	4	 
	Section 7.1 Fees and Expenses 
	 	 	4	 
	Section 7.2 Cost Recovery by Agency Markets 
	 	 	4	 
	Section 7.3 Accounts and Disbursements 
	 	 	4	 
	 
	 	 	 	 
	ARTICLE VIII INDEMNIFICATION 
	 	 	4	 
	Section 8.1 Dispute Resolution 
	 	 	4	 
	Section 8.2 Indemnification by Agency Markets 
	 	 	7	 
	Section 8.3 Indemnification by Liberty Mutual 
	 	 	7	 
	Section 8.4 Indemnification Procedure 
	 	 	7	 
	Section 8.5 Insurance 
	 	 	7	 
	 
	 	 	 	 
	ARTICLE IX TERMINATION 
	 	 	7	 
	Section 9.1 Mutual Agreement 
	 	 	7	 
	Section 9.2 Termination by Agency Markets 
	 	 	7	 
	Section 9.3 Termination by Liberty Mutual 
	 	 	7	 
	Section 9.4 Return of Books and Records 
	 	 	7	 
	Section 9.5 No Prejudice 
	 	 	7	 
	Section 9.6 Transition Period 
	 	 	7	 
	 
	 	 	 	 
	ARTICLE X CONFIDENTIALITY 
	 	 	8	 
	 
	 	 	 	 
	ARTICLE XI MISCELLANEOUS 
	 	 	10	 
	Section 11.1 Assignment 
	 	 	10	 
	Section 11.2 Amendments and Waivers 
	 	 	10	 

 

 

	 	 	 	 	 

	Section 11.3 Entire Agreement 
	 	 	10	 
	Section 11.4 Governing Law 
	 	 	10	 
	Section 11.5 Notices 
	 	 	10	 
	Section 11.6
No Third Party Beneficiaries 
	 	 	11	 
	Section 11.7 Counterparts 
	 	 	11	 
	Section 11.8 Interpretation 
	 	 	12	 
	Section 11.9 Legal Enforceability 
	 	 	12	 

 

 

CLAIMS SERVICE AGREEMENT

THIS CLAIMS SERVICE AGREEMENT, effective as of January 1, 2010 (“Service Agreement”), is made and
entered into by and between Liberty Mutual Insurance Company, a Massachusetts insurance company
with offices at 175 Berkeley Street, Boston, MA 02116, on behalf of itself and its affiliates when
operating as the National Markets business unit (“National Markets”), Helmsman Management Services
LLC, a Massachusetts limited liability company with offices 175 Berkeley Street, Boston, MA 02116
(“Helmsman”) (Helmsman together with National Markets, “Liberty Mutual”) and Peerless Insurance
Company a New Hampshire insurance company with offices at 62 Maple Avenue, Keene, NH 03431, on
behalf of itself, its subsidiaries and affiliates operating as Liberty Mutual Agency Markets
(“Agency Markets”).

WITNESSETH

WHEREAS, National Markets is a business unit within the Liberty Mutual Group, a group of insurers
and associated companies engaged in the transaction of insurance and other related enterprises
(“Liberty Mutual Group”); and

WHEREAS, Helmsman is also a member of the Liberty Mutual Group that provides certain claims
adjusting and related insurance services in the United States; and

WHEREAS, Agency Markets is also a member of the Liberty Mutual Group engaged in the transaction of
property and casualty insurance business in the United States; and

WHEREAS, the parties believe it is mutually beneficial to have Agency Markets provide certain
claims adjusting and related services for and on behalf of Liberty Mutual.

NOW, THEREFORE, in consideration of the mutual promises and undertakings hereinafter set forth,
the parties do agree as follows:

ARTICLE I

APPOINTMENT;

REGULATORY APPROVALS

Section 1.1 Appointment. Liberty Mutual hereby appoints Agency Markets as a non-exclusive
contractor to provide Liberty Mutual with the Services (as defined herein), on the terms and
subject to the conditions set forth herein. Agency Markets hereby accepts such appointment, on
such terms and subject to such conditions.

Section 1.2 Regulatory Approvals. It shall be a condition to the effectiveness of this Service
Agreement that Liberty Mutual and Agency Markets shall have obtained approval of this Service
Agreement from those state insurance departments or other regulatory authorities, the approval of
which is required for the effectiveness of this Service Agreement.

ARTICLE II

SERVICES PROVIDED BY AGENCY MARKETS

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At the direction of the management of Liberty Mutual, Agency Markets shall provide services
requested by Liberty Mutual and agreed to by Agency Markets (the “Services”), including without
limitation:

(a) Claims Management Services: including (i) receipt, processing, settlement and payment of claims
in the states of Alaska, Idaho, Montana, Oregon and Washington under the policies of workers
compensation insurance and claims adjusting service agreements issued by Liberty Mutual pursuant to
requests from Liberty Mutual (the “Portfolio”); (ii) acknowledgement of the receipt of notices
received from policyholders in connection with any claims; (iii) investigation of any claim, as
necessary, to determine its validity and compensability, including verification of coverage and
status information and utilization of any relevant documents and/or information made available to
Agency Markets and advice to the appropriate person of the results of such investigation; (iv)
notification to policyholders of declined claims and the reasons for such declinations; (v)
response to any inquiry, complaint or request received from any policyholder, agent, broker,
regulator or other interested party pertaining to or regarding any such claim, and recordation of
such complaints in complaint logs to be maintained by Agency Markets
on Liberty Mutual’s behalf; (vi)
compliance with claims file maintenance, record retention and reconciliation requirements in
conformity with the standards for performance set forth in this Service Agreement or as otherwise
agreed by the parties; (vii) engagement and direction, as necessary, of attorneys, consultants or
other professionals in connection with the processing, defense and handling or any such claims;
(vii) defense of disputed claims; (ix) delivery of notices and other communications to
policyholders; and (x) generally, all such other acts and things as are reasonably necessary or
otherwise required in the administration of all such claims relating to the Portfolio;

(b) Additional Services; Curtailed Services. If Liberty Mutual requires from Agency Markets
additional services that are not otherwise contemplated under this Service Agreement, the parties
shall negotiate in good faith to reach a mutually acceptable arrangement under which such
additional services shall be provided by Agency Markets. Such arrangements shall provide for
Liberty Mutual to provide reasonable compensation to Agency Markets for such additional services.
If Liberty Mutual curtails their requirement that Agency Markets provide certain of the Services
that are contemplated under this Service Agreement, the parties shall negotiate in good faith to
reach a mutually acceptable arrangement under which such curtailed services shall no longer be
provided by Agency Markets. Such arrangement shall provide for Liberty Mutual to no longer provide
compensation to Agency Markets for such curtailed services.

ARTICLE III

PERFORMANCE OF SERVICES

Agency Markets shall utilize its employees or employees of its affiliates within the Liberty
Mutual Group to perform the Services; provided, however, that Agency Markets may retain such
legal, financial, actuarial and other advisors and service providers, as Agency Markets reasonably
deems necessary in its reasonable discretion to perform the Services in compliance with the terms
and conditions of this Service Agreement. Agency Markets shall act in good faith, in a

2

 

commercially reasonably manner, and in accordance with customary industry standards and applicable
laws for the provision of the Services.

ARTICLE IV

LIBERTY MUTUAL’S RESPONSIBILITIES

Section 4.1 Duty to Oversee; Ultimate Responsibility; Hold Harmless. All Services provided by
Agency Markets to Liberty Mutual shall be subject to oversight by Liberty Mutual. Liberty Mutual
shall have the right to direct and control the business which is being serviced by Agency Markets
on behalf of Liberty Mutual.

ARTICLE V

BOOKS AND RECORDS

Section 5.1 Books and Records Maintained by Agency Markets; Inspection Rights. Agency Markets
shall maintain and retain for applicable periods, consistent with Liberty Mutual’s current
policies and procedures or as required by law, books and records relating to the Portfolio and the
Services provided hereunder (the “Books and Records”). Liberty Mutual, insurance regulatory
authorities and their respective designated representatives shall have the right to inspect the
Books and Records upon reasonable notice during Agency Markets’ normal business hours.

Section 5.2 Property of Liberty Mutual; Return After Termination; Inspection Rights. Agency
Markets acknowledges and agrees that the Books and Records are and shall remain the property of
Liberty Mutual. Agency Markets shall promptly return the Books and Records to Liberty Mutual upon
the termination of this Service Agreement in accordance with Article 9.4; provided, however, that
in the event that a dispute arises between Liberty Mutual and Agency Markets, Agency Markets shall
have the right at any time after the termination of this Service Agreement and with reasonable
prior notice to inspect the Books and Records returned to Liberty Mutual insofar as the Books and
Records relate to such dispute, and to make copies thereof or extracts therefrom; and provided,
further, that nothing in this Article V shall supersede, preclude or otherwise limit any discovery
rights otherwise available to Agency Markets or Liberty Mutual.

ARTICLE VI

THE RELATIONSHIP BETWEEN LIBERTY MUTUAL AND AGENCY MARKETS

Agency Markets and Liberty Mutual agree that:

(a) Liberty Mutual and Agency Markets are not partners or joint venturers with each other, and
nothing herein shall be construed so as to make them partners or joint venturers with each other,
or to impose any liability as such on either of them. Agency Markets shall perform its duties
hereunder as an independent contractor and not as an employee or agent of Liberty Mutual. Except as
expressly granted in this Service Agreement or otherwise by the other party in writing, or as may
be required by law, or as is necessary to perform the Services to be provided hereunder, no party
shall have any authority, express or implied, to act on behalf of the other party or its

3

 

subsidiaries.

(b) Agency Markets shall hold any amounts collected by it with respect to the Portfolio for the
benefit of Liberty Mutual. Funds held in such account shall be remitted to Liberty Mutual, or
transferred to a Liberty Mutual account, as directed by Liberty Mutual.

(c) Each party agrees to notify the other party within a reasonable time upon receipt of any
written or oral communication from any state insurance department or any other government or
regulatory department or agency of such department’s or agency’s intention to proceed with any
administrative action, such as a hearing, fine, license suspension or revocation or similar action,
against Liberty Mutual or Agency Markets, which administrative action relates in any way to
Liberty Mutual’s or Agency Markets’ performance under this Service Agreement or which
otherwise relates to the Portfolio.

(d) In the event that Liberty Mutual or Agency Markets or both are made parties to, or threatened
with, any legal or regulatory proceeding arising out of or in connection with the Services or the
Portfolio, it is agreed that they will promptly notify and cooperate fully with each other to
defend,
settle, compromise or otherwise resolve such legal or regulatory proceeding consistent with the
intent of this Service Agreement,

(e) Agency Markets shall reasonably cooperate with Liberty Mutual in connection with the
provision of the Services under this Service Agreement. Notwithstanding anything in this Service
Agreement to the contrary, Liberty Mutual shall retain the ultimate authority to make all decisions
with respect to the Services.

ARTICLE VII

SERVICE FEES AND EXPENSES

Section 7.1 Fees and Expenses. Charges, fees and expenses to be charged by Agency Markets and paid
by Liberty Mutual hereunder for services rendered on the Portfolio until December 31, 2010 are set
forth in “Fee Schedule — 2010” attached. Thereafter successive Fee Schedules will be negotiated and
agreed by the parties and attached hereto. Fees for losses or loss adjustment expense are not
included in this Agreement and will be billed directly to the file.

Section 7.2 Cost Recovery By Agency Markets. Notwithstanding anything herein to the contrary,
Agency Markets shall be entitled to receive from Liberty Mutual, the amount of Agency Markets’
full actual cost of providing the Services hereunder, and therefore, if the fees charged do not
equal Agency Markets’s full actual cost of providing the Services during the term hereof, then
Liberty Mutual shall pay Agency Markets the amount of such deficiency as an additional fee
hereunder.

Section 7.3 Accounts and Disbursements. Amounts owing between the parties shall be settled on a
quarterly basis and payment of amounts owing shall be made within 45 days after the end of the
calendar quarter.

ARTICLE VIII

4

 

DISPUTE RESOLUTION & INDEMNIFICATION

Section 8.1
Dispute Resolution.

i) Any controversy, claim or dispute arising out of or relating to this Agreement, or the breach,
termination or validity thereof (each, a “Dispute”) shall be resolved as set forth in this
Article VIII.

          (a) Within ten (10) days or as soon as reasonably practicable after any
party’s receipt of a notice of Dispute from the other party setting forth in detail and
together with
supporting documentation, if any, the nature and basis of the Dispute (the “Dispute
Notice”), to
the general counsel and the chief financial officer of Liberty Mutual and the general counsel
and
the chief financial officer of Agency Markets shall meet in person at a mutually acceptable
time
and place, and thereafter as often as they reasonably deem necessary, to attempt in good faith
to
resolve the Dispute.

          (b) If either the chief financial officer of Liberty Mutual or Agency
Markets declares an impasse then within thirty (30) days after receipt of the Dispute Notice, the
respective chief executive officers of Liberty Mutual or Agency Markets shall meet in person at a
mutually acceptable time and place, and thereafter as often as they reasonably deem necessary, to
attempt in good faith to resolve the Dispute.

          (c) If either the chief executive officer of Liberty Mutual or Agency
Markets declares an impasse no earlier than sixty (60) days after receipt of the Dispute Notice (or
such shorter period, if the parties so agree in writing), then, at the instruction of either
party’s chief executive officer, the Dispute shall be referred to, and finally settled by,
confidential and binding arbitration in accordance with the then-prevailing JAMS Streamlined
Arbitration Rules and Procedures as modified as follows (the “Rules”):

     (i) There shall be three (3) neutral arbitrators of whom each party shall select
one. The claimant shall select its arbitrator in its demand for arbitration and the
respondent shall select its arbitrator within thirty (30) days after receipt of the
demand for arbitration. The two (2) arbitrators so appointed shall select a third
arbitrator to serve as chairperson within fourteen (14) days of the designation of the
second of the two (2) arbitrators. If any arbitrator is not timely appointed, at the
request of any party such arbitrator shall be appointed by JAMS pursuant to the
listing, striking and ranking procedure in the Rules.

     (ii) Each arbitrator appointed by a party shall be either
an attorney with substantial experience with the property and casualty reinsurance and
insurance industry and at least ten (10) years admission to the bar, or a property and
casualty reinsurance and insurance industry professional of at least ten (10) years
standing. The chair of the arbitral tribunal shall either be a practicing attorney
with no less than ten (10) years of practice and experience as an

5

 

arbitrator, with, if possible, experience relating to insurance or
reinsurance disputes, or be a retired judge.

     (iii)The place of arbitration shall be Boston,
Massachusetts, unless some other place is mutually selected by the parties. The
arbitral tribunal shall be required to follow the law of the Commonwealth of
Massachusetts. The decision of the arbitral tribunal shall be final and binding on the
parties and shall be the sole and exclusive remedy between the parties regarding the
matter presented to the arbitral tribunal, including any claims, counterclaims, issues
or accounting presented to the tribunal. Judgment upon the decision may be entered in
any court having jurisdiction. The arbitral tribunal is empowered to award any remedy
provided for under applicable law and the terms of this Agreement, including
injunction, specific performance or other forms of equitable relief. The arbitral
tribunal is not empowered to award damages in excess of compensatory damages. Each
party hereby irrevocably waives any right to recover punitive, exemplary or similar
damages with respect to any Dispute.

     (iv) Any arbitration proceedings, decision or award
rendered hereunder and the validity, effect and interpretation of this arbitration
agreement shall be governed by the Federal Arbitration Act, 9 U.S.C. Section 1 et
seq.

          (d) Each party shall bear its own costs in any negotiations pursuant to
Section 9(b) or Section 9(c) and any arbitration, provided that the parties shall
share the fees and
expenses of the arbitrators equally as well as any JAMS fees and expenses.

          (e) All negotiations conducted pursuant to Section 9(b) or Section 9(c)
shall be confidential and shall be treated as compromise and settlement negotiations and may
not
be introduced as evidence of an admission against interest of either party.

          (f) Notwithstanding the foregoing provisions, either party may seek the
provisional judicial remedy of a preliminary injunction or specific performance, if in its
reasonable judgment such action is necessary to avoid irreparable harm. Without prejudice to
such provisional remedies as may be available under the jurisdiction of such court, the
arbitral
tribunal shall have full authority to grant provisional remedies and to direct the parties to
request
that any court modify or vacate any temporary or preliminary relief issued by such court, and
to
award damages for the failure of any party to respect the arbitral tribunal’s orders to that
effect.

          (g) The parties hereby submit to the jurisdiction of the courts of the
Commonwealth of Massachusetts located in Boston, Massachusetts, for the purpose of seeking
any provisional remedies as contemplated by Section 9(g). In any such action, suit or
proceeding,
each of the parties irrevocably and unconditionally waives, and agrees not to assert by way of
motion, as a defense or otherwise, any claim that the party is not subject to the jurisdiction
of the

6

 

above courts, that such action or suit is brought in an inconvenient forum or that the venue of
such action, suit or other proceeding is improper. To the fullest extent permitted by applicable
law, each of the parties irrevocably waives all rights to trial by jury in any such action, suit or
other proceeding.

Section 8.2 Indemnification by Agency Markets. Notwithstanding anything to the contrary in this
Service Agreement, Agency Markets shall indemnify Liberty Mutual and its directors, officers,
employees and agents against all claims, losses and reasonable costs and expenses (including, but
not limited to, reasonable attorneys’ fees and costs) arising out of any action or
inaction taken or omitted to be taken by Agency Markets or its agents, employees or subcontractors
in connection with its obligations under this Service Agreement; provided, however, under no
circumstances shall Agency Markets be liable or responsible for costs, fees or expenses associated
with Portfolio claims.

Section 8.3 Indemnification by Liberty Mutual. Notwithstanding anything to the contrary in this
Service Agreement, Liberty Mutual shall indemnify Agency Markets and its directors, officers,
employees and agents against all claims, losses and reasonable costs and expenses (including, but
not limited to, reasonable attorneys’ fees and costs) arising out of any action or inaction taken
or omitted to be taken by Liberty Mutual or its agents, employees or subcontractors in connection
with its obligations under this Service Agreement.

Section 8.4 Indemnification Procedure. Any payment to be made under this Article VIII shall be
made within twenty (20) Business Days (as defined herein) of the delivery of notice of an
uncontested claim for indemnification or, in the case of a contested claim, within twenty (20)
Business Days of final determination of the amount for which indemnification will be made
hereunder. Any amount not paid within such twenty (20) Business Day period shall bear simple
interest at the 30-Day C.P. Rate from the twentieth (20th) day until the date of payment. As used
in this Service Agreement, the term “Business Day” shall mean any day that is not a Saturday or
Sunday or a day on which the principal place of business of Agency Markets is closed or a day on
which banking institutions in the City of Boston are generally authorized or obligated by law or
executive order to close.

Section 8.5 Insurance. Each party agrees to maintain at its own expense during the term of this
Service Agreement reasonable amounts of the following types of insurance: workers compensation and
employees liability, general liability, business automobile liability, professional liability and
fidelity bonds.

ARTICLE IX

TERMINATION

Section 9.1 Mutual Agreement. This Service Agreement may be terminated by mutual consent of Liberty
Mutual and Agency Markets.

Section 9.2 Termination by Agency Markets. This Service Agreement may be terminated by Agency
Markets:

7

 

(a) (i) upon ninety (90) days written notice, or (ii) upon forty-five (45) days written notice by
Agency Markets if (1) Liberty Mutual becomes insolvent or files a voluntary petition in
bankruptcy, rehabilitation or liquidation, or makes an assignment for the benefit of creditors, or
(2) if a committee of creditors or other representatives is appointed to represent its business or
an
involuntary petition in bankruptcy, rehabilitation or liquidation is filed against it, and Liberty
Mutual fails within thirty (30) days following the appointment of such committee or
representative to cause the discharge of such committee or representatives or the dismissal of such
petition, except to the extent that the receiver, liquidator or trustee confirms a part or all of
the
services to be provided by Agency Markets under this Service Agreement and continues to make
payment in accordance with Article VII for the services so confirmed; or

(b) upon written notice by Agency Markets if Liberty Mutual fails to make payment of any fees or
expenses in accordance with Article VII and such failure has not been cured within thirty (30)
days after the date such payment was due.

Section 9.3 Termination by Liberty Mutual. This Service Agreement may be terminated by Liberty
Mutual (i) upon ninety (90) days written notice, (ii) upon forty-five (45) days’ written notice if
(1) Agency Markets becomes insolvent or files a voluntary petition in bankruptcy or liquidation,
or makes an assignment for the benefit of creditors, or (2) if a committee of creditors or other
representatives is appointed to represent its business or any involuntary petition in bankruptcy
or liquidation is filed against it, and Agency Markets files within thirty (30) days following the
appointment of such committee or representative to cause the discharge of such committee or
representatives or the dismissal of such petition, or (iii) Agency Markets materially breaches the
terms and conditions of this Service Agreement and such breach has not been cured within
forty-five (45) days following written notice by Liberty Mutual setting forth the breach.

Section 9.4 Return of Books and Records to Liberty Mutual. In the event of termination of this
Service Agreement by Liberty Mutual, (i) Liberty Mutual shall promptly arrange, at its sole cost,
for the return to Liberty Mutual or transfer to another party of all of the Books and Records of
Liberty Mutual provided to Agency Markets or created in the the provision of the Services, and (ii)
Agency Markets shall cooperate fully with Liberty Mutual in such return or transfer.

Section 9.5 No Prejudice. The termination of this Service Agreement shall be without prejudice to
any rights or liabilities of any party hereunder which shall have accrued prior to such
termination, and shall not affect any provisions of this Service Agreement that are expressly or
by necessary implication intended to survive such termination.

Section 9.6 Transition Period. In the event of termination of this Service Agreement, Agency
Markets shall continue to provide the Services at the then current Fee Schedule for a period that
is reasonably necessary to enable the performance of the Services to be transferred to another
party not to exceed ninety (90) days.

ARTICLE X

CONFIDENTIALITY

(a) As used in this Agreement, the term “Confidential Information” shall mean any and all

8

 

information concerning the business, property, operations, policies of insurance, software,
finances, claims information, practices and procedures, policyholder/client data, underwriting
information, and reinsurance arrangements (including summaries, analyses, studies, or other
compilations of such information) of Liberty Mutual derived in connection with the provision of the
Services by Liberty Mutual, except such information which is or becomes available to the public
other than as a result of disclosure by Agency Markets or the directors, officers, employees,
agents, or representatives of Agency Markets, and shall include not only written information but
also information stored or transferred orally, visually, electronically, or by an other means.

(b) Agency Markets will hold all Confidential Information confidential and will not disclose any
Confidential Information to any party which is not an affiliate, except as may be required to
provide the Services, as authorized in advance by Agency Markets in writing or otherwise, or as
may be required by law, in which case Agency Markets shall promptly provide notice to Agency
Markets that such Confidential Information has been so required by law so that Agency Markets
may seek a protective order or other appropriate remedy. Agency Markets will use its
commercially reasonable best efforts (but without out-of-pocket costs or expenses) to obtain or
assist Agency Markets in obtaining such protective order or other appropriate remedy.

(c) Customer Data. Agency Markets agrees that should Liberty Mutual provide or allow access
to information or identity of persons and entities insured by Liberty Mutual or to whom services
are rendered by Liberty Mutual including non-public personally identifiable information of
individuals and all of this material shall be treated as highly sensitive Confidential Information
by
Agency Markets. Agency Markets agrees: (1) to hold such information and/or materials as
Confidential Information hereunder; (2) to use such materials and/or information only to perform
Services on behalf of Liberty Mutual; (3) to delete, destroy, and/or return such material and
information upon completion of the Services rendered to Liberty Mutual. Except for the purposes
of carrying out this Agreement, Agency Markets shall not disclose or use any non-public
personally identifiable information about an insured or claimant provided by Liberty Mutual to
Agency Markets. “Non-public personally identifiable information” is financial or medical
information of or concerning a private person, which has been obtained from sources that are not
available to the general public or obtained from the person who is the subject and may include
data elements such as names and addresses of individuals. Such information shall not be
reproduced or shared with any other party except those entities with which Agency Markets may
from time to time contract in accordance with the fulfillment of the terms of this Agreement and
which disclosure shall comply with all state and federal statutes and regulations governing the
disclosure of medical records and non-public personally identifiable information, including any
state or federal laws pertaining to the confidentiality of medical records. Agency Markets shall
promptly adopt and implement security procedures to protect Liberty Mutual/Claimant
Information from improper disclosure or use, such procedures to be in compliance with all
applicable federal and state regulatory requirements and will immediately notify Liberty Mutual
of any breach or suspected breach of data security.

(d) Exclusions. For purposes hereof, “Confidential Information” will not include any information
that the Receiving Party can establish by convincing written evidence: (i) was independently
developed by the Receiving Party without use of or reference to any Confidential Information
belonging to the Disclosing Party; (ii) was acquired by the Receiving Party from a

9

 

third party having the legal right to furnish same to the Receiving Party; or (iii) was at the
time in question (whether at disclosure or thereafter) generally known by or available to the
public (through no fault of the Receiving Party).

(e) Required Disclosures. These confidentiality obligations will not restrict any disclosure
required by order of a court or any government agency, provided that the Receiving Party gives
prompt notice to the Disclosing Party of any such order and reasonably cooperates with the
Disclosing Party at the Disclosing Party’s request and expense to resist such order or to obtain a
protective order.

ARTICLE XI

MISCELLANEOUS

Section 11.1 Assignment. None of the parties hereto shall assign or transfer or permit the
assignment or transfer of this Service Agreement without the prior written consent of the other,
which consent shall not be unreasonably withheld. All such assignments shall be subject to all
necessary regulatory approvals.

Section 11.2 Amendments and Waivers. This Service Agreement may not be amended, and none of its
provisions may be modified, except expressly by a written instrument signed by the parties hereto.
No failure or delay of a party in exercising any power or right hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise of any such right or power, or any
abandonment or discontinuance of steps to enforce such a right or power, preclude any other or
further exercise thereof or the exercise of any other right or power. No waiver by a party of any
provision of this Service Agreement or consent to any departure therefrom shall in any event be
effective unless the same shall be in writing and signed by such party, and then such waiver or
consent shall be effective only in the specific instance and for the specific purpose for which it
is given.

Section 11.3 Entire Agreement. This Service Agreement constitutes the entire agreement among the
parties with respect to the subject matter hereof and supersedes all other prior negotiations,
commitments, agreements, and understandings, both written and oral, between the parties or any of
them with respect to the subject matter hereof.

Section 11.4 Governing Law. This Service Agreement shall be deemed to have been made under and
governed by the laws of the Commonwealth of Massachusetts, except for the portion of such laws
having to do with conflicts of law.

Section 11.5 Notices. All notices and other communications under this Service Agreement shall be in
writing and shall be delivered personally, or sent by confirmed facsimile transmission or
nationally recognized overnight delivery service. Any such notice or other communication shall be
deemed given upon actual delivery in each case to the following addresses:

(a) If to Liberty Mutual to:

Chris Conway

10

 

Financial Officer

Liberty Mutual, National Market

Liberty Mutual Group

175 Berkeley Street

Boston, MA 02116-5066

     With a copy to:

Stan Hiers, Counsel

Liberty Mutual, Commercial Markets

Liberty Mutual Group

175 Berkeley Street

Boston, MA 02116-5066

(b) If to Agency Markets to:

Michael J. Fallon, Chief Financial Officer

Liberty Mutual Agency Markets

Liberty Mutual Group

175 Berkeley Street

Boston, MA 02116-5066

     With a copy to:

Edmund Kenealy, Vice President and General Counsel

Liberty Mutual Agency Markets

Liberty Mutual Group

175 Berkeley Street

Boston, MA 02116-5066

Section 11.6
No Third Party Beneficiaries. Nothing in this Service Agreement is intended to confer
any rights or remedies under or by reason of this Service Agreement on any parties other than
Liberty Mutual, Agency Markets, a party entitled to identification under Article IX and their
respective heirs, executors, successors, and assignees. Nothing in this Service Agreement is
intended to relieve or discharge the obligations or liability of any third parties to Liberty
Mutual or Agency Markets. No provision of this Service Agreement shall give any third parties any
right of subrogation or action over or against Liberty Mutual or
Agency Markets.

Section 11.7 Counterparts. This Service Agreement may be executed in two or more counterparts, each
of which shall be deemed to be original, but all of which shall constitute one and the same
instrument.

Section 11.8 Interpretation. The descriptive headings are inserted for convenience of reference
only and are not intended to be part of, or to affect the meaning or interpretation of this
Service Agreement.

11

 

Section 11.9 Legal Enforceability. Any term or provision of this Service Agreement which is
invalid or unenforceable in any jurisdiction shall, as to that jurisdiction, be ineffective to the
extent of such invalidity or unenforceability without rendering invalid or unenforceable the
remaining terms and provisions of this Service Agreement or affecting the validity or
enforceability of any of the terms or provisions of this Service Agreement in any other
jurisdiction. If any provision of this Agreement is so broad as to be unenforceable, that provision
shall be interpreted to be only so broad as is enforceable.

     IN WITNESS WHEREOF, this Service Agreement has been duly executed.

LIBERTY MUTUAL INSURANCE COMPANY

	 	 	 	 	 
	 	 	 
	By:  	 	/s/ George Doonan
 	 
	Name:  	 	George Doonan 	 	 
	Title:  	 	Chief Financial Officer, Commercial Markets 	 	 
	 

HELMSMAN
MANAGEMENT SERVICES LLC

	 	 	 	 	 
	 	 	 
	By:  	 	/s/ Christopher Conway
 	 
	Name:  	 	Christopher Conway 	 	 
	Title:  	 	Vice President and Assistant Treasurer 	 	 
	 

PEERLESS INSURANCE COMPANY

	 	 	 	 	 
	 	 	 
	By:  	 	/s/ Michael J. Fallon
 	 
	Name:  	 	Michael J. Fallon 	 	 
	Title:  	 	Chief Financial Officer 	 	 

12

 

	 	 	 	 	 

FEE SCHEDULE -2010

NW Claims Fees

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	2010 Claims Service Fees (with 5% Overhead) Charged to National Markets and Helmsman	 
	 	 	Management Services LLC Based Upon Projected 2010 Claims Volume	 
	 	 	 	 	 	 	Helmsman	 	 	 	 
	 	 	 	 	 	 	Management Services	 	 	 	 
	 	 	National	 	 	LLC	 	 	Total	 
	Total
	 	$	2,591,626	 	 	$	2,646,491	 	 	$	5,238,117	 
	 
	 	 	 	 	 	 	 	 	 

If the aggregate number of new Liberty Mutual claims actually reported to Agency
Markets pursuant to this Agreement is greater than 105% of the number of new claims
projected for 2010, Liberty Mutual will pay the reconciliation rate per claim shown
below for each claim in excess of 105% of the number of new claims projected for
2010:

Indemnity Claims: $721

Medical Only Claims : $168

If the aggregate number of new Liberty Mutual claims actually reported to Agency
Markets pursuant to this Agreement is less than 95% of the number of new claims
projected for 2010, Agency Markets will refund the reconciliation rate per claim
shown below for the difference between the number of claims actually reported and
95% of the number of new claims projected for 2010:

Indemnity Claims : $721

Medical Only Claims : $168

13

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