Document:

Exhibit 10.26

 

Dated 
                                2004

 

 

GEFA International Holdings,
Inc.

 

and

 

GE Capital Corporation

 

 

Framework Agreement

 

 

CONFIDENTIAL TREATMENT
REQUESTED

 

CONFIDENTIAL
TREATMENT REQUESTED: INFORMATION FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN
REQUESTED IS OMITTED AND IS NOTED WITH “**”.   AN UNREDACTED VERSION OF THIS DOCUMENT HAS BEEN FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION.

 

 

 

One Silk Street

London EC2Y 8HQ

 

 

Telephone (44-20) 7456 2000

Facsimile (44-20) 7456 2222

 

Ref

 

 

THIS AGREEMENT is
made
the                            2004

 

BETWEEN:

 

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

 

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

 

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

 

RECITALS:

 

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

 

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

 

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

 

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

 

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

 

THE PARTIES
AGREE AS FOLLOWS:

 

1                                         Definitions And
Interpretation

 

1.1                               Definitions

 

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

 

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

 

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

 

“Applicable Laws” means any of the following
in force from time to time in any of the Territories: any common law, statute,
statutory instrument, treaty, rule, regulation, directive, guideline, guidance,
decision, bylaw, code, order, notice, demand, decree, resolution or judgement
or licence conditions, or anything similar to any of the above in each case of
a Governmental Authority and which is binding on GECC or any GECF Group Company
or GEFA or any GEFA Company;

 

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

 

 

the reasonable opinion of the parties meets
the due diligence requirements set out in Schedule 13 of this agreement;

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

“Commencement Date” means 1 January, 2004;

 

“Committed Payments Product” means any of
the following:

 

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

 

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

 

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

 

“Confidential Information” means:

 

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

 

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

 

2

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

“Control” means:

 

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

 

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

 

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

 

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

 

3

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

“Exit Phase” means:

 

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

 

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

 

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

 

4

 

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

 

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

 

“GECF Group” means any subsidiary of GECC
from time to time (other than Acquired GECF Business or GEFA Companies) who,
from time to time, distributes Payment Protection Products in conjunction with
entering into consumer financing agreements or arrangements where the relevant
GECF Group Company (or a member of its Group) acts as the provider of finance.
“GECF
Group Company” shall be construed accordingly;  Where GECF is successful in procuring that
Acquired GECF Business appoints a GEFA Company as its exclusive provider of
Payment Protection Products pursuant to Clause 3.2.3, then this definition
shall automatically include such Acquired GECF Business;

 

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

 

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

 

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

 

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

 

“GEFI Guernsey” means Financial Insurance
Guernsey PCC Limited;

 

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

 

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

 

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

 

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

 

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

 

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

 

5

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

6

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

“Payment Protection Products” means any of
the following:

 

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

 

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

 

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

 

“Policies” means the Payment Protection
Products provided by GEFA Companies as either the primary insurer or provider
or the reinsurer (including the existing product details set out in Schedule 1)
and such Payment Protection Products which GECF Group Companies are authorised
to market and sell and which are brought within the scope of this agreement
from time to time by the execution of an addendum and “Policy” shall be construed
accordingly;

 

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

 

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

 

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

 

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

 

7

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

“Sales Commission” means in relation to:

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

“Tax/levy” means any tax, levy or stamp duty
or any charge payable in respect of insurance premiums levied by any tax
authority in any jurisdiction covered by this agreement to be charged to
Insured Customers at the applicable rate from time to time

 

8

 

including any similar, equivalent, additional
or replacement tax, levy or charge which may be imposed on or in relation to
insurers or insurance transactions from time to time;

 

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

 

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

 

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

 

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

 

1.2                               Interpretation

 

The following rules apply unless the context
requires otherwise:

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

9

 

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

 

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

 

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

 

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

 

General Procurement Obligation

 

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

 

2                                         Local Agreements

 

2.1                               Local Addendums

 

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

 

2.1.1                     clause 2.3;

 

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

 

2.1.3                     clause 4;

 

2.1.4                     clause 6.1.1;

 

2.1.5                     clause 8;

 

2.1.6                     clause 9.1, 9.2, 9.4 and Schedule 2;

 

2.1.7                     clause 10.2;

 

2.1.8                     clause 11;

 

2.1.9                     clause 12.1;

 

2.1.10              clause 13;

 

2.1.11              clause 15;

 

2.1.12              clause 16.2 and Schedule 6 Part B;

 

2.1.13              clause 17;

 

2.1.14              clause 18;

 

2.1.15              clause 20.4;

 

2.1.16              clause 21.3;

 

10

 

2.1.17              clause 22;

 

2.1.18              clause 23; and

 

2.1.19              clause 24.

 

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

 

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

 

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

 

2.2                               Inconsistency between this Agreement and Local Agreements

 

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

 

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

 

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

 

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

 

2.3                               Term of Local Agreements

 

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

 

3                                         Exclusive Appointment

 

3.1                               Exclusive Appointment in respect of Existing Business

 

11

 

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

 

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

 

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

 

(a)                                  New Payment Protection Products;

 

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

 

(c)                                  Identified New Business,

 

and any related services.

 

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

 

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

 

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

 

provided that nothing in this
Clause 3.2.4 shall prevent:

 

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

 

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

 

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

 

3.2.5                     Schedule 1C sets out in respect of all Identified New Business
production estimates and whether premiums are single or monthly and whether
such Identified New Business will be New Direct Business or New Reinsurance
Business.

 

12

 

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

 

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

 

(b)                                 The GECF Group Companies shall not unless GEFA requests be required
to **.

 

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

 

3.2.6                        Where GECC or a GECF Group Company acquires a business or
establishes any joint venture or partnership or any other business relationship
in a Territory (an “Acquired GECF Business”) GECC shall, and GECC or the
relevant GECF Group Company shall, use its reasonable efforts to **.

 

In the event that GECC or the relevant GECF
Group Company is, notwithstanding their reasonable efforts, unable to **, GECC
shall, and shall procure that the relevant GECF Group Company shall, use its
reasonable efforts to **.

 

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

 

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

 

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

 

4                                         Regulatory Requirements

 

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

 

4.2                               In the event that there are any changes to an applicable regulatory
regime within a Territory which will impact on the sale or distribution of
Payment Protection Products under this agreement or the ability of GEFA or a
GEFA Company to meet its Service Level

 

13

 

obligations,
GEFA shall inform GECC, as soon as reasonably practicable after such change,
and the Parties shall work together to agree a plan to enable the Parties to
continue to perform their obligations under this agreement (the “Remediation
Plan”). If the parties cannot agree a Remediation Plan within 10 Business Days
of notice by GEFA, then the matter will be referred to the dispute resolution
procedure in Clause 15.

 

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

 

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

 

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

 

4.4                               Benefits of Changes

 

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

 

5                                         Financial Terms

 

5.1                               Existing Direct Business and Substitute Business

 

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

 

5.2                               Existing Reinsured Business

 

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

 

5.2.2                     When GECC has established the GECF Captive and the necessary arrangements
are in place to allow the primary reinsurer to cede to GEFI Guernsey, the
Existing Reinsured Business shall be migrated to become New Reinsurance
Business (in accordance with Clause 5.6). 
Each Scheme to be migrated, and the timetable for such migration, shall
take effect according to the terms of proposals which shall be

 

14

 

issued in
writing from GECC to GEFA promptly upon the necessary arrangements being put in
place, unless GEFA within 10 Business Days of the issue of any such proposal
sends notice in writing to GECC that it, in its reasonable opinion, considers
the terms or timetable for the relevant migration to be impractical, in which
case the Parties shall negotiate in good faith such amendments to the relevant
proposal as are necessary to allow the relevant Existing Reinsured Business to
be migrated to the New Reinsurance Business to the satisfaction of the Parties,
such Schemes continuing on the terms of Existing Business until the Parties reach
agreement. Those Schemes that are not migrated will continue on the terms of
Existing Reinsured Business in Schedule 1. For the avoidance of doubt, once any
Existing Reinsured Business has been migrated it will still form part of the
volume incentive calculations referred to in clause 5.3 below.

 

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

 

5.3                               Volume Incentive

 

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

 

5.4                               New Business

 

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

 

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

 

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

 

(b)                                 clause 3.2;

 

(c)                                  clause 4;

 

15

 

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

 

(e)                                  clause 6.1.2 and Schedule 3;

 

(f)                                    clause 8;

 

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

 

(h)                                 clause 10.2;

 

(i)                                     clause 11;

 

(j)                                     clause 12.2;

 

(k)                                  clause 13;

 

(l)                                     clause 15;

 

(m)                               clause 16.2 and Schedule 6 Part B;

 

(n)                                 clause 17;

 

(o)                                 clause 18;

 

(p)                                 clause 20.4;

 

(q)                                 clause 21.3;

 

(r)                                    clause 22;

 

(s)                                  clause 23; and

 

(t)                                    clause 24.

 

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

 

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

 

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

 

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

 

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

 

16

 

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

 

(ii)                                  enter into a New Local Agreement.

 

5.5                               New Direct Business

 

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

 

5.6                               New Reinsurance Business

 

5.6.1

 

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

 

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

 

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

 

6                                         Pricing - Profit Share and
Financial Performance

 

6.1                               Profit Share - calculation and payment

 

17

 

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

 

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

 

6.2                               Financial Performance

 

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

 

7                                         Marketing

 

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

 

8                                         Non Solicit

 

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

 

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

 

9.1                               Service Levels and Service Credits

 

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

 

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

 

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

 

9.2                               Good Industry Practice

 

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

 

18

 

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

 

9.3                               Service Level Review

 

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

 

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

 

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

 

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

 

9.4                               Product Development and Marketing

 

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

 

(z)                                   Payment Protection Products;

 

(aa)                            features of such Payment Protection Products; and

 

(bb)                          related marketing services,

 

that are offered to consumers in the relevant
Territory.

 

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

 

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

 

19

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

9.4.6                     Where the relevant GECF Group Company rejects the GEFA Proposal or
GEFA declines to develop any Offering(s), subject to 9.4.14, GECC and the
relevant GECF Group Company shall have no obligation to appoint GEFA or any
GEFA Company as its exclusive provider in respect of the relevant Local
Agreement in respect of the Offering(s) and GECC and the relevant GECF Group
Company shall be free to enter into discussions, tenders, negotiations,
arrangements and agreements with third parties and/or other GECF Group
Companies in respect of the relevant Offering(s). The relevant GECF Group Company
shall invite GEFA to

 

20

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

9.4.13              If GEFA or a GEFA Company make a GEFA Proposal in accordance with
Clause 9.4.4 and the relevant GECF Group Company at any time during the Term of
the relevant Local Agreement pursuant to which the GEFA Proposal was made
decides

 

21

 

to implement
the GEFA Proposal with a third party, then the relevant GECF Group Company
shall be required to make a request pursuant to Clause 9.4.3 of the agreement.

 

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

 

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

 

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

 

then the relevant GECF Group Company shall
notify the relevant GEFA Company and both Parties shall be obliged to follow
the procedure in Clause 9.4.3, save that Clause 9.4.4(b) shall not apply and
the GEFA Company shall not have the option of providing a GEFA Proposal
pursuant to Clause 9.4.4(a)(ii).  For
the avoidance of doubt, the tender process shall not be reactivated until such
time as the GECF Group Company would be entitled to proceed to tender pursuant
to Schedule 5 or Schedule 16.

 

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

 

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

 

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

 

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

 

10                                  Intellectual Property, Data and Data
Protection

 

10.1                        Licence of Intellectual Property

 

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

 

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

 

22

 

from
time to time in writing. For the avoidance of doubt, GECC has no obligation to
use the GEFA Marks.

 

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

 

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

 

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

 

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

 

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

 

23

 

10.2                        Ownership of Intellectual Property Rights

 

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

 

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

 

10.3                        Ownership of Data

 

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

 

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

 

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

 

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

 

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

 

24

 

11                                  Data Protection

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

25

 

12                                  Gross Written Premiums and
Collection

 

12.1                        Existing Business

 

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

 

12.2                        New Business

 

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

 

13                                  Cancellations and
Cancellation Fees

 

13.1

 

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

 

13.2

 

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

 

14                                  Default Interest

 

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

 

15                                  Relationship Managers, and
Informal Dispute Resolution and Arbitration

 

15.1

 

GEFA on the one hand and GECC on the other
shall each appoint a representative (the “Relationship Managers”) who shall be
primarily responsible for the day to day co-ordination and management of this
agreement and the Business relationship between the Parties.  Each Party shall notify the other in writing
of the identity of its Relationship Manager. The Relationship Managers may
delegate any and all of their responsibilities to

 

26

 

appropriate representatives. Each Party shall
procure that its Relationship Manager and/or representative shall devote
sufficient time and attention to his or her duties and responsibilities and
shall be available to the other at all reasonable times.

 

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

 

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

 

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

 

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

 

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

 

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

 

16                                  Performance Meetings And
Report Outs

 

16.1                        Framework Agreement Performance Meetings

 

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

 

16.2                        Local performance meetings

 

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

 

27

 

17                                  Accounts, Records and Access to
Information

 

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

 

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

 

17.3                        Without prejudice to any other right of either Party under this
agreement and subject to Applicable Laws and the confidentiality provisions of
clause 23, if any material complaint, claim or allegation is made (whether to
or by any regulatory authority or by any Insured Customer or to any ombudsman
or otherwise) or any proceedings (whether civil, criminal, investigative or
administrative) shall be instituted against a Party or, any GEFA Company or any
GECF Group Company (the “Affected Party”) or any of their agents or
sub-contractors which in any way relates to any Payment Protection Product
comprising the Business or the marketing, sale, administration and fulfilment
thereof or to any Insured Customer or prospective Insured Customer (or if a
Party reasonably believes that any such claim or allegation may be made or such
proceedings instituted), the other Party shall promptly make available (on the
written request of the Affected Party or its legal advisers), and procure that
any relevant GEFA Company or GECF Group Company (as the case may be) shall
promptly make available, such documentation, information, files and papers and
copies thereof as shall be in the possession of the other Party, GEFA Company
or GECF Group Company (as the case may be) or any of its agents or
sub-contractors which may relate in any way to the subject matter of such
complaint, claim, allegation or proceedings and which it is not prevented from
disclosing by virtue of any Applicable Law or any obligation of
confidentiality.

 

18                                  Assignment, Agents and
Sub-Contracting

 

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

 

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

 

28

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

19                                  Warranty of Authority

 

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

 

20                                  Commencement, Term and Termination

 

20.1                        Commencement and Term

 

29

 

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

 

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

 

20.2                        Termination Rights of GECC

 

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

 

(a)                                  GEFA becomes Insolvent;

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

20.2.3              If in any Relevant Period Eligible GWP is in excess of 20 per cent.
lower than Comparable GWP in two or more Territories (a “Material Change”), GECC
shall, have the right, by notice in writing to GEFA, within 10 Business Days of
the occurrence of such Material Change, to initiate the procedure set out in
Part C of

 

30

 

Schedule 5.
For the avoidance of doubt, if a Material Change results or may be reasonably
said to result from a general reduction in the amount of financing or other
activity or a reduction due to any specific management decision of GECC or a
GECF Group Company which results in a reduction in production in the relevant
Territories, then the procedure in Part C of Schedule 5 shall not be initiated
and a Material Change shall be deemed not to have occurred.

 

20.3                        Termination Rights of GEFA

 

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

 

20.4                        Termination Rights under Local Agreements

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

31

 

20.4.3              GECC shall not provide a notice to terminate pursuant to Clause
20.4.1(iv) without first referring the matter to the dispute resolution
procedure referred to in Clause 15.  If
the dispute resolution procedure: (i) does not lead to the Parties agreeing a
remediation plan in respect of the breaches then GECC may terminate this
agreement pursuant to Clause 20.4.1(iv) or (ii) produces an agreed resolution
plan but GEFA fails to comply with such plan, then the breach(es) shall be
deemed to be material and GECC may terminate the Local Agreement in accordance
with Clause 20.4.1(iii).

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

(iii)                               Within 15 Business Days of the occurrence of the Regulatory Event,
the Affected GEFA Company shall produce and provide to the relevant GECF Group
Company a proposal updated from time to time as appropriate setting out the
action which the Affected GEFA Company intends to take in

 

32

 

order to
comply with the terms of the notice from the Financial Services Regulator and
the timetable within which such action shall be taken.

 

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

 

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

 

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

 

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

 

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

 

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

 

21                                  Consequences of Termination

 

21.1                        Termination of this Agreement

 

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

 

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

 

21.2                        Surviving Clauses

 

21.2.1              Termination or expiry of this agreement for whatever reason shall be
without prejudice to the rights, obligations and liabilities of either Party
then accrued due and shall not affect the coming into force or the continuation
in force of this clause

 

33

 

21.2.1 or of
any provision of this agreement which is expressly stated to continue in force
at or after termination or expiry including , 10.3, 11, 15, 17, 21.3, 23, 30
and 31.

 

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

 

21.3                        Exit Plan and Termination Assistance

 

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

 

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

 

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

 

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

 

22                                  Force Majeure

 

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

 

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

 

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

 

34

 

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

 

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

 

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

 

23                                  Confidential Information

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

23.2.4              is required to be disclosed by any Applicable Law.

 

23.3                        Notwithstanding clause 23.1:

 

23.3.1              a Party may disclose Confidential Information relating to another to
its professional advisers for the purposes of obtaining professional advice
provided that the

 

35

 

disclosing
Party shall advise any such person to whom such information is disclosed of the
confidentiality obligations contained in this agreement and shall procure that
such person complies with such obligations as if it were a party to this
agreement; and

 

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

 

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

 

24                                  Waiver

 

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

 

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

 

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

 

25                                  Entire Agreement

 

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

 

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

 

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

 

36

 

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

 

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

 

26                                  Costs and Expenses

 

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

 

26.2                        Except as expressly provided in this agreement, GECC shall not be
entitled to any other remuneration or to be reimbursed for any cost, charge or
expense incurred by it in each case in connection with this agreement or the
performance of its obligations hereunder. For the avoidance of doubt, this
clause shall not operate to exclude or limit any liability of GEFA for breach
of contract or its negligence.

 

27                                  No Partnership

 

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

 

28                                  Notices

 

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

 

In the case of GEFA to:

 

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

Fax: 44 20 8380 3300

Attention: European Legal Director

 

In the case of GECC to:

 

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

 

Fax: 44 1923 
426871

 

Attention: General Counsel, Europe

 

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

 

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

 

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

 

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

 

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

 

37

 

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

 

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

 

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

 

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

 

29                                  Invalidity and Severability

 

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

 

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

 

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

 

shall not be affected or
impaired in any way thereby.

 

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

 

30                                  Governing Law and
Jurisdiction and Appointment of Process Agent

 

30.1                        Governing Law and Jurisdiction

 

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

 

30.2                        Appointment of Process Agent

 

30.2.1              GEFA hereby irrevocably appoints (Marked for the attention of
Company Secretary) Financial Insurance Company Limited, [Vantage West, Great
West Road, Brentford, Middlesex TW8 9AG], as its agent to accept service of
process in England in any legal action or proceedings arising out of this
agreement, service upon whom shall be deemed completed whether or not forwarded
to or received by GEFA.

 

38

 

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

 

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

 

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

 

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

 

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

 

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

 

31                                  Exclusion of Third Party
Rights

 

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

 

39

 

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

 

	
  Signed by

  	
  )

  
	
   

  	
   

  
	
  for and on behalf of

  	
  )

  
	
   

  	
   

  
	
  GEFA INTERNATIONAL HOLDINGS, INC.

  	
  )

  
	
   

  	
   

  
	
  in the presence of:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Signed by

  	
  )

  
	
   

  	
   

  
	
  for and on behalf of

  	
  )

  
	
   

  	
   

  
	
  GE CAPITAL CORPORATION

  	
  )

  
	
   

  	
   

  
	
  in the presence of:

  	
   

  

 

40

 

 

Schedule
1

Existing Business

 

[Note: To be
checked]

 

Part A – Existing Direct Business

 

	
  Territory

  	
   

  	
  Product

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  
	
  UK (GCF)

  	
   

  	
  Bank Card
  Account Cover 3

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  UK (GCF)

  	
   

  	
  Bank Card
  Account Cover 3 over 70’s

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  UK (GCF)

  	
   

  	
  Store Card
  Account Cover 3

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  UK (GCF)

  	
   

  	
  Store Card
  Account Cover 3 over 70’s

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  UK (GCF)

  	
   

  	
  Monsoon
  Account Cover 3

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  UK (GCF)

  	
   

  	
  Monsoon
  Account Cover 3 over 70’s

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  UK (GCF)

  	
   

  	
  3335 Comet,
  B&Q Revolving

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  UK (GCF)

  	
   

  	
  3334 Comet,
  B&Q fixed

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  UK (GCF)

  	
   

  	
  3303 Toys R
  Us

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  UK (GCF)

  	
   

  	
  3358 DFS

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  UK (GCF)

  	
   

  	
  3644 Kwik
  Fit

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  UK (GCF)

  	
   

  	
  Store Credit
  Card Beagle

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  UK (GCF)

  	
   

  	
  Matrix

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  Sweden

  	
   

  	
  NA0

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  Sweden

  	
   

  	
  NA1

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  Sweden

  	
   

  	
  RD1

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  Sweden

  	
   

  	
  RD2

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  Sweden

  	
   

  	
  RR1

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  Sweden

  	
   

  	
  GC1-6

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  Sweden

  	
   

  	
  GD9

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  Sweden

  	
   

  	
  RD3

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  Denmark

  	
   

  	
  G36

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  Denmark

  	
   

  	
  G37

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  Denmark

  	
   

  	
  G38

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  

 

41

 

	
  Denmark

  	
   

  	
  G39

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  Denmark

  	
   

  	
  G35
  Compulsory Life

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  Denmark

  	
   

  	
  G34
  Compulsory Life

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  Denmark

  	
   

  	
  G29
  Compulsory Life

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  Denmark

  	
   

  	
  G2B
  Compulsory Life

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  Denmark

  	
   

  	
  G40
  Compulsory Life

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  Denmark

  	
   

  	
  G41
  Compulsory Life

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  Denmark

  	
   

  	
  G56 Xtra
  Tryghed

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  Denmark

  	
   

  	
  G57 Xtra
  Tryghed

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  Denmark

  	
   

  	
  G58 Xtra
  Tryghed

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  Denmark

  	
   

  	
  G59 Xtra
  Tryghed

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  Denmark

  	
   

  	
  AC1
  AcceptCard

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  Norway

  	
   

  	
  6604

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  Norway

  	
   

  	
  6602

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
   

  	
   

  	
  6612

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  Norway

  	
   

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

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  Norway

  	
   

  	
  6812

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  Norway

  	
   

  	
  6703, 6803,
  6903

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  Norway

  	
   

  	
  6603

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  Norway

  	
   

  	
  6613

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  Norway

  	
   

  	
  6913,
  6914,6915

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  Norway

  	
   

  	
  6813

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  Norway

  	
   

  	
  6601

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  Norway

  	
   

  	
  6611

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  Norway

  	
   

  	
  6811

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  Norway

  	
   

  	
  6504a, 6504b

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  
	
  Switzerland

  	
   

  	
  GC4
  ProKredit

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  Switzerland

  	
   

  	
  GC5 Prolimit

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  Switzerland

  	
   

  	
  GC6
  Unileasing

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  Switzerland

  	
   

  	
  GC7Sales
  Finance

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  Italy

  	
   

  	
  GE4
  Finanziamento Sereno

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  

 

42

 

	
  Italy

  	
   

  	
  GE5
  Finanziamento Sereno Plus

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  Italy

  	
   

  	
  GE6 Lease
  & Life

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  Italy

  	
   

  	
  GE7 Lease
  & Life Plus

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  Italy

  	
   

  	
  GEB
  Resolicitation

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  France

  	
   

  	
  Auto

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  France

  	
   

  	
  Vie 3011

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  France

  	
   

  	
  Vie 0007

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  France

  	
   

  	
  Vie 0011

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  France

  	
   

  	
  Vie 0029

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  France

  	
   

  	
  Vie 0039

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  France

  	
   

  	
  Vie 0052

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  France

  	
   

  	
  Vie 0091

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  France

  	
   

  	
  RD 0022

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  France

  	
   

  	
  RD 0029

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  France

  	
   

  	
  RD 0074

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  France

  	
   

  	
  RD 0116

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  France

  	
   

  	
  RD 0045

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  France

  	
   

  	
  RD 0057

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  France

  	
   

  	
  RD 0075

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  France

  	
   

  	
  RD 0120

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  France

  	
   

  	
  Mortgage

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  France

  	
   

  	
  0001

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  France

  	
   

  	
  0022

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  France

  	
   

  	
  0019

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  France

  	
   

  	
  1995

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  France

  	
   

  	
  0024

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  France

  	
   

  	
  0054

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  France

  	
   

  	
  0055

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  France

  	
   

  	
  0089

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  France

  	
   

  	
  0090

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  France

  	
   

  	
  0030

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  France

  	
   

  	
  3595

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  France

  	
   

  	
  0003

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  

 

43

 

	
  France

  	
   

  	
  0087

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  France

  	
   

  	
  0088

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  France

  	
   

  	
  0118

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  France

  	
   

  	
  0119

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  France

  	
   

  	
  0069

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  France

  	
   

  	
  0056

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  France

  	
   

  	
  GE branded

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  France

  	
   

  	
  Co-branded

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  Germany

  	
   

  	
  SG1-2

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  

 

Part B – Existing Reinsured Business

 

	
  Territory

  	
   

  	
  Product

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  
	
  UK (Woodchester)

  	
   

  	
  BU, BU2 Cap
  care Premier HP

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  UK (Woodchester)

  	
   

  	
  BUR, 2BU Cap
  care Premier PCP

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  UK (Woodchester)

  	
   

  	
  CUB, 2CB
  Custom Finance

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  UK (Woodchester)

  	
   

  	
  K1B, K2B
  Keyman Basic

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  UK (Woodchester)

  	
   

  	
  K3B, K4B
  Keyman Standard

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  UK (Woodchester)

  	
   

  	
  K5B, K6B
  Keyman Premier

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  UK (Woodchester)

  	
   

  	
  BA, BA2 Cap
  Care Standard

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  UK (Woodchester)

  	
   

  	
  BL, BL2 Cap
  Care Basic HP

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  UK (Woodchester)

  	
   

  	
  BLR 2BL Cap
  care Basic PCP

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  UK (Woodchester)

  	
   

  	
  BAR, 2BA Cap
  care Standard PCP

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  Ireland

  	
   

  	
  PA –
  PN, TA –TR
  Auto business

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  Ireland

  	
   

  	
  WB –
  WY, XB –
  XY Consumer business

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  

 

44

 

	
  Ireland

  	
   

  	
  KA –
  KF Equipment business

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  Germany

  	
   

  	
  SPA-B

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  Germany

  	
   

  	
  SPG-J

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  Germany

  	
   

  	
  SPC-F

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  Spain

  	
   

  	
  BF20

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  Spain

  	
   

  	
  BF22

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  Spain

  	
   

  	
  Super PPI

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  Spain

  	
   

  	
  resolicitation

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  Portugal

  	
   

  	
  WAA, WNA,
  WFA

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  
	
  Portugal

  	
   

  	
  WAB –
  WAM, WNB – WNM, WFB – WFM

  	
   

  	
  **

  	
  %

  	
  **

  	
  %

  	
  **

  	
  %

  

 

45

 

Part C

 

 

**

 

46

 

Schedule
2

GE Financial Insurance Service Level
Standards

 

1                                      Glossary

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

2                                      Hours
Of Service

 

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

 

47

 

3                                      Notification
and Reconciliation of Insurance Processing

 

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

 

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

 

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

 

Operating
Reconciliation Process (Chart 1)

 

 

The Service Levels that apply are:

 

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

 

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

 

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

 

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

 

48

 

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

 

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

 

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

 

3.2                            Financial
Control Reconciliation Process

 

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

 

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

 

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

 

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

 

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

 

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

 

4                                      Management
Information associated with Processing

 

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

 

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

 

49

 

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

 

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

 

5                                      New
Policy Fulfilment

 

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

 

6                                      Telephony

 

6.1                            In-Bound

 

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

 

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

 

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

 

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

 

(v)                              Dashboards will be
created monthly by GEFA and reviewed at the Monthly Performance Meetings.  Such dashboards will show clearly the volume
of calls, the percentage answered within the Service Level, the average
response time and the abandon rate where applicable.

 

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

 

6.2                            Out-Bound

 

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

 

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

 

7                                      General
Queries & Correspondence

 

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

 

50

 

Business Day
after the mean date on which the envelopes containing such correspondence
(including claims) were franked.

 

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

 

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

 

7.1                            Claims
Queries and Notification

 

7.1.1                  Telephone
Requests

 

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

 

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

 

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

 

7.2                            Claim
Notification by Mail

 

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

 

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

 

7.3                            Claim
Handling

 

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

 

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

 

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

 

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

 

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

 

(a)                               decision to decline;

 

(b)                              decision to accept/pay;
or

 

51

 

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

 

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

 

(vi)                           Decline process:

 

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

 

(vii)                        Decision to accept/pay process:

 

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

 

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

 

(viii)                     Further information required:

 

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

 

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

 

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

 

8                                      Management
Information associated with managing claims

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

9                                      Claims
Accuracy Audit

 

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

 

52

 

9.2                            The
Service Levels for Claims Decision Accuracy shall be:

 

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

 

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

 

(iii)                             Decision Accuracy shall
be:

 

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

 

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

 

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

 

on all GECC claims audited within the monthly audit period,

 

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

 

10                               Customer
Satisfaction Surveys

 

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

 

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

 

11                               Complaints
Handling Process

 

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

 

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

 

53

 

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

 

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

 

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

 

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

 

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

 

12                               IT
Services

 

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

 

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

 

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

 

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

 

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

 

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

 

13                               Pricing
Requests

 

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

 

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

 

54

 

14                               Finance
Requests

 

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

 

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

 

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

 

15                               Legal
Requests

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

55

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

16                               Business
Continuity

 

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

 

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

 

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

 

56

 

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

 

17                               Dependencies

 

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

 

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

 

(ii)                                any other act or
omission of GECC.

 

Table A

 

GECF Dependencies

 

	
  GEFA Key
  Service Levels

  	
   

  	
  MEASUREMENT

  	
   

  	
  GECF
  DEPENDENCY

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

  	
   

  	
  Monthly
  Dashboards of NIP - Confirmed, Pending and Rejected.

  	
   

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

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

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

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Paragraph 3.2(II) of this Schedule

  	
   

  	
  [   ]

  	
   

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

  

 

57

 

	
  GEFA Key
  Service Levels

  	
   

  	
  MEASUREMENT

  	
   

  	
  GECF
  DEPENDENCY

  
	
  Paragraph 3 of this Schedule

  	
   

  	
  [   ]

  	
   

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

  	 

	
   

  	
   

  	
   

  	
   

  	
   

  	 

	
   

  	
   

  	
   

  	
   

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

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

  (ii) the
  expiry of 20 Business Days from the date on which GECC complies with its
  obligation in paragraph 12.2(iii) above.

  	 

	
   

  	
   

  	
   

  	
   

  	
   

  	 

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

  	
   

  	
  Monthly
  Dashboards/ Sampling as required.

  	
   

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

  	 

							

 

18                               Key
Service Levels

 

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

 

Table B

 

Primary Operational
Metrics and Service Credits

 

	
  Primary Operational Metrics -  Service Standards

  	
   

  	
   

  
	
  **

  	
   

  	
  **

  
	
  **

  	
   

  	
  **

  

 

58

 

	
  Primary Operational Metrics - Service Standards

  	
   

  	
   

  
	
  **

  	
   

  	
  **

  
	
  **

  	
   

  	
  **

  
	
  **

  	
   

  	
  **

  
	
  **

  	
   

  	
  **

  
	
  **

  	
   

  	
  **

  

 

19                               Service
Credit regime

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

59

 

Schedule
3

New Local Agreement Profit Share Provisions

 

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

 

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

 

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

 

(each a “Relevant Date”).

 

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

 

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

 

(a)                                For each individual
Scheme, GEFA shall calculate the Gross Earned Premiums

 

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

 

(i)                                  the Sales Commission
incurred;

 

(ii)                               Earned Retention;

 

(iii)                            all claims payments made
under the relevant Policies and related expenses incurred;

 

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

 

(v)                              all applicable
Tax/levies;

 

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

 

(vii)                        agreed extraordinary expenses
incurred.

 

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

 

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

 

60

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

61

 

Schedule
4

Product Performance Monitoring

 

The Claims
Performance Statement

 

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

 

•                                        Earned
Exposure in the quarter;

 

•                                        Gross
Earned Premium;

 

•                                        Earned
Claims Fund;

 

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

 

•                                        Claims
paid;

 

•                                        Claims
reserved by type;

 

•                                        Claims
Frequency;

 

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

 

•                                        Gross
Loss Ratio; and

 

•                                        Risk
Loss Ratio.

 

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

 

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

 

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

 

GECC and GEFA hereby agree that discussions relating to individual
Schemes shall be restricted to those Schemes which are agreed to be of a size
where the claims performance has stabilised but in determining whether or not
such stabilisation has occurred the Parties shall have regard to the
performance of the relevant Schemes before they become subject to a Local
Agreement as well as after.

 

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

 

62

 

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

 

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

 

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

 

•                                        Such
other mechanism as agreed between the Parties.

 

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

 

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

 

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

 

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

 

•                                        Such
other mechanism as agreed between the Parties.

 

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

 

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

 

63

 

Schedule
5

Potential New Business and Payment Protection

Products Set-up Process

 

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

 

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

 

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

 

1                                      Notification

 

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

 

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

 

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

 

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

 

4                                      If
the relevant GEFA Company has provided the expression of interest within 7
Business Days in accordance with paragraph 3 above, the relevant GECF Group
Company will provide the relevant GEFA Company as soon as reasonably
practicable with the following information in its or any GECF Group Company’s
possession or control on the Payment Protection Products and related services
as set out in the notification given pursuant to paragraph 1, subject to
Applicable Laws and any confidentiality obligations on it:

 

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

 

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

 

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

 

64

 

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

 

•                                        Existing gross premium rates

 

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

 

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

 

•                                        Method of premium collection

 

•                                        Number of insured customers

 

•                                        Method of policy fulfilment (GECC or Insurer)

 

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

 

•                                        Historic loss ratios and definition of loss
ratios

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

65

 

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

 

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

 

5.6                            details
of:

 

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

 

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

 

5.6.3                   GEFA
IT & Operations support;

 

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

 

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

 

5.6.6                   confirmation
of applicable GEFA internal risk approval; and

 

5.6.7                   GECC
HR support/advice required; and

 

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

 

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

 

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

 

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

 

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

 

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

 

66

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

(i)                                  not have accrued
Service Credits; or

 

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

 

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

 

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

 

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

 

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

 

7.2                            If
the relevant GECF Group Company rejects the New Business Proposal, it shall
provide detailed written reasons for such rejection setting out the criteria
that have not been satisfied. Where the relevant GECF Group Company rejects the
New Business Proposal,

 

67

 

the relevant GEFA Company shall have the
right within 5 Business Days of receipt of notification of such rejection to:

 

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

 

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

 

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

 

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

 

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

 

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

 

9.1                            Where
the relevant GECF Group Company rejects a New Business Proposal or Amended New
Business Proposal according to the criteria set out in paragraphs 6 above
(other than on the basis of the Risk Rate), GECC and the relevant GECF Group
Company shall have no obligation to appoint GEFA or any GEFA Company as its
provider, whether exclusive or otherwise, in the relevant Territory in respect
of the New Business Proposal and GECC shall be free to enter into discussions,
tenders, negotiations, arrangements and agreements with third parties and/or
other GECF Group Companies in respect of the relevant New Business Proposal.
The relevant GECF Group Company shall invite GEFA to take part in any
subsequent tender process conducted by the relevant GECF Group Company in
respect of the New Business Proposal provided that the relevant GEFA Company
agrees that the provisions for determining the Retention Rate and the Risk Rate
for the New Business Proposal as set out in Parts II and Part III (as the case
may be) of Schedule 16 (Business Proposal Pricing Process) shall apply to their
submission save that, if an Actuary were to determine the Risk Rate pursuant to
Paragraphs 5 or 9.2 of Schedule 16 (as the case may be), then the relevant GECF
Group Company or the relevant GEFA Company would be entitled to reject the
proposed Risk Rate. In either case, the relevant GECF Group Company would be
entitled to award the tender to any third party.

 

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

 

68

 

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

 

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

 

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

 

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

 

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

 

12                               If:

 

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

 

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

 

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

 

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

 

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

 

69

 

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

 

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

 

1                                      paragraph
1;

 

2                                      paragraph
3;

 

3                                      paragraph
4;

 

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

 

5                                      paragraph
6;

 

6                                      paragraph
7;

 

7                                      paragraph
8;

 

8                                      paragraph
9;

 

9                                      paragraph
10 ;

 

10                               paragraph
11; and

 

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

 

Part C: Material Change Process

 

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

 

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

 

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

 

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

 

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

 

70

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

71

 

5.2                            upon
receipt of the Amended Material Change Proposal, GECC or the relevant GECF
Group Company shall assess such Amended Material Change Proposal and shall
provide written notice to GEFA or the relevant GEFA Company of its decision to
accept or reject the Amended Material Change Proposal (in the case of
rejection, with detailed written reasons) within 5 Business Days.

 

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

 

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

 

8                                      If:

 

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

 

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

 

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

 

then paragraph 9 shall apply.

 

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

 

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

 

11                               GEFA
or the relevant GEFA Company shall within 20 Business Days of the date of the
offer in paragraph 10 accept or reject the terms of the offer.  In the event that the offer is accepted, the
relevant parties shall promptly agree an addendum to the relevant Local
Agreement which reflects the terms of the offer and the relevant GEFA Company
shall continue to be the exclusive supplier to the relevant GECF Group Company
of Payment Protection Products in the relevant Territory.  If:

 

72

 

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

 

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

 

paragraph 12 shall apply.

 

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

 

73

 

Schedule
6

Part A: Framework Agreement Performance Meetings

 

1                                      Quarterly Performance Meetings

 

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

 

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

 

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

 

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

 

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

 

(e)                                Service Credits; and

 

(f)                                  Claims Reserve
methodology and calculation.

 

2                                      Monthly Performance Meetings

 

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

 

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

 

(b)                               Service Credits; and

 

(c)                                Potential New Business
opportunities.

 

Part B: Local Agreement Performance Meetings

 

1                                      Weekly Meetings

 

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

 

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

 

74

 

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

 

2                                      Monthly
Meetings

 

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

 

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

 

75

 

Schedule
7

Supplemental Sales Commission

 

**

 

76

 

Schedule
8

Local Agreements

 

DENMARK

 

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

 

Addendum – 47

 

COMMENCEMENT DATE –
1 JANUARY 2001

 

NORWAY

 

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

 

COMMENCEMENT DATE –
1 JANUARY 2001

 

SWEDEN

 

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

 

Addendum - TBC

 

COMMENCEMENT DATE -
1 AUGUST 2000

 

UK

 

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

 

Addendum – TBC

 

COMMENCEMENT DATE –
2000

 

UK AUTO

 

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

 

Addendum – 1

 

COMMENCEMENT DATE –
1 JANUARY 2000

 

IRELAND

 

PARTIES: COMBINED
LIFE ASSURANCE COMPANY OF EUROPE LIMITED and LONDON GENERAL INSURANCE COMPANY
LIMITED and FINANCIAL ASSURANCE

 

77

 

COMPANY LIMITED and FINANCIAL INSURANCE COMPANY LIMITED (Reinsurance
Agreement). Corresponding Fronting insurance agreement in place with GECC.

 

Addendum – 1

 

COMMENCEMENT DATE –
1 JANUARY 2000

 

GERMANY

 

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

 

Addendum – 6

 

COMMENCEMENT DATE –
1 DECEMBER 2000

 

SWITZERLAND

 

PARTIES: GE
CAPITAL BANK and FINANCIAL INSURANCE COMPANY LIMITED

 

Addendum – 5

 

COMMENCEMENT DATE –
1 APRIL 2000

 

SPAIN

 

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

 

Addendum – TBC

 

COMMENCEMENT DATE –
1 JANUARY 2000

 

PORTUGAL

 

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

 

78

 

Addendum  – TBC

 

COMMENCEMENT DATE –
1 MAY 2000

 

ITALY

 

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

 

Addendum – TBC

 

COMMENCEMENT DATE –
1 JULY 2001

 

FRANCE

 

TBC

 

79

 

Schedule
9

GEFA Group Companies

 

•                                       GEFA
International Holdings Inc.

 

•                                       GEFA
UK Finance Limited

 

•                                       GEFA
UK Holdings Limited

 

•                                       CFI
Administrators Limited

 

•                                       Financial
Insurance Guernsey PCC Limited

 

•                                       FIG
Ireland Limited

 

•                                       RD
Plus SA

 

•                                       Financial
Insurance Group Services Limited

 

•                                       Financial
Assurance Company Limited

 

•                                       Financial
New Life Company Limited

 

•                                       Consolidated
Insurance Group Limited

 

•                                       Financial
Insurance Company Limited

 

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

 

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

 

•                                       Vie
Plus S.A.

 

•                                       UK
Group Holding Company Limited

 

•                                       Assocred
S.A.

 

80

 

Schedule 10

EXCHANGE RATES

 

Exchange rates

 

	
   

  	
   

  	
  Currency $ 1=

  	
   

  	
  1 Euro =

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Existing

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  UK

  	
   

  	
  UKP

  	
   

  	
  0.630

  	
   

  	
  0.720

  	
   

  
	
  Ireland

  	
   

  	
  EUR

  	
   

  	
  0.876

  	
   

  	
  1.000

  	
   

  
	
  Germany

  	
   

  	
  EUR

  	
   

  	
  0.876

  	
   

  	
  1.000

  	
   

  
	
  Spain

  	
   

  	
  EUR

  	
   

  	
  0.876

  	
   

  	
  1.000

  	
   

  
	
  Portugal

  	
   

  	
  EUR

  	
   

  	
  0.876

  	
   

  	
  1.000

  	
   

  
	
  Sweden

  	
   

  	
  SEK

  	
   

  	
  8.132

  	
   

  	
  9.287

  	
   

  
	
  Denmark

  	
   

  	
  DKK

  	
   

  	
  6.525

  	
   

  	
  7.452

  	
   

  
	
  Norway

  	
   

  	
  NOK

  	
   

  	
  7.334

  	
   

  	
  8.375

  	
   

  
	
  Switzerland

  	
   

  	
  CHF

  	
   

  	
  1.340

  	
   

  	
  1.530

  	
   

  
	
  Italy

  	
   

  	
  EUR

  	
   

  	
  0.876

  	
   

  	
  1.000

  	
   

  
	
  France

  	
   

  	
  EUR

  	
   

  	
  0.876

  	
   

  	
  1.000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  New

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  **

  	
   

  	
  **

  	
   

  	
  0.876

  	
   

  	
  1.000

  	
   

  
	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  
	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  
	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  

 

81

 

Schedule 11

Form of Local Addendum

 

This Addendum is made on [  ]
between:

 

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

 

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

 

Recitals

 

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

 

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

 

It is agreed as follows:

 

1                                         Interpretation

 

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

 

2                                         Definitions

 

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

 

3                                         Amendment

 

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

 

4                                         Provisions of the Framework Agreement to apply to the Master
Agreement

 

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

 

4.1                               clause
2.3;

 

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

 

4.3                               clause
4;

 

4.4                               clause
6.1.1;

 

4.5                               clause
8;

 

4.6                               clause
9.1, 9.2, 9.4 and Schedule 2;

 

4.7                               clause
10.2;

 

82

 

4.8                               clause
11;

 

4.9                               clause
12.1;

 

4.10                        clause 13;

 

4.11                        clause 15;

 

4.12                        clause
16.2 and Schedule 6 Part B;

 

4.13                        clause 17;

 

4.14                        clause 18;

 

4.15                        clause
20.4;

 

4.16                        clause
21.3;

 

4.17                        clause 22;

 

4.18                        clause 23;
and

 

4.19                        clause 24.

 

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

 

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

 

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

 

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

 

5.                                      Governing Law

 

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

 

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

 

83

 

Schedule 12

Form of New Local Agreement

 

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

 

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

 

(ii)                               clause
3.2;

 

(iii)                            clause
4;

 

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

 

(v)                              clause
6.1.2 and Schedule 3;

 

(vi)                           clause
8;

 

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

 

(viii)                     clause 10.2;

 

(ix)                             clause
11;

 

(x)                                clause
12.2;

 

(xi)                             clause
13;

 

(xii)                          clause
15;

 

(xiii)                       clause 16.2
and Schedule 6 Part B;

 

(xiv)                      clause 17;

 

(xv)                         clause
18;

 

(xvi)                      clause 20.4;

 

(xvii)                   clause 21.3;

 

(xviii)                clause 22;

 

(xix)                        clause 23;
and

 

(xx)                           clause
24.

 

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

 

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

 

(xxiii)                  For the
avoidance of doubt, no New Local Agreement shall contain any provision which
confers on the GECF Group Company which is a party to such Local Agreement any
right

 

84

 

to terminate such Local Agreement on a sale or disposal affecting the
whole of or any part of any party to that Local Agreement (in either case,
whether such sale or disposal is effected by way of an asset or business sale
or a share sale or otherwise (including by the sale of a portfolio or by a
change of the identity of the financing provider)).

 

[Others].

 

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

 

85

 

Schedule 13

APPROVED SUBCONTRACTORS

 

Due Diligence from GECF On Subcontractors

 

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

 

86

 

GE Consumer Finance

 

•                  Due
Diligence

 

Detailed
Plan

 

87

 

ICT Group - Due Diligence for GE Consumer
Finance

 

Index
and Assigned Responsibilities

 

	
  Page

  	
   

  	
  Area

  	
   

  	
  Owner

  	
   

  	
  Completed

  	
   

  	
  Reviewed

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Pg.

  	
   

  	
  Personnel

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Pg.

  	
   

  	
  Operations

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Pg.

  	
   

  	
  Sales and Marketing

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Pg.

  	
   

  	
  Quality Control

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Pg.

  	
   

  	
  Facilities

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Pg.

  	
   

  	
  Information Systems

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

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

 

88

 

Personnel

 

Discuss with appropriate management the
following items:

 

	
  1.

  	
  Are employees issued badges?

  	
   

  	
  Are photos included?

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.

  	
  Are visitors issued badges?

  	
   

  	
  Logged in?

  	
   

  	
  Escorted?

  

 

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

 

4.               If so,
how?                                                      

 

5.     Are the various work areas
partitioned off?

 

6.     Are background checks made on
new employees?

If so,

 

a)                    Drug
tests            :

b)                   Credit check:

c)                    Criminal
history:

d)                   Other:

 

Operations

 

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

 

1.                                       Customer
Service

 

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

 

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

 

c)                                      Review
of complaint resolution procedures.

 

d)                                     Cancellation
process:

 

e)                                      Customer
complaint process:

 

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

 

g)                                     Tenure
of CSRs:

 

h)                                     Training:

 

i)                                         Monitoring

 

i.                                          Tapes
available to observe customer service:

 

ii.                                       Samples
of monitoring criteria/forms:

 

iii.                                    Review
process for evaluating reps:

 

iv.                                   Disciplinary
procedure for reps:

 

89

 

v.                                      Review process
for handling customer service center complaints:

 

v.                                      Monitoring
standards:

 

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

 

Sales and Marketing

 

1.                                       Obtain the
following information pertaining to:

 

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

 

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

 

c)              Customer
satisfaction results.

 

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

 

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

 

3.               Describe the List
Control strategy.

 

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

 

5.               For channels used,
address the following:

 

a)                                      Number
of campaigns a year

 

b)                                     Capacity
to develop and deliver per day

 

c)                                      Fulfillment
of channel

 

h)                                     Quality
control procedures for above

 

 

Telemarketing (Inbound/Outbound and customer service):

 

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

 

b)                                      Sales
verification process- describe/timing:

 

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

 

d)                                      Telemarketing
Representative Incentive Plan — describe:

 

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

 

f)                                         Monitoring
process and procedures — please provide:

 

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

 

h)                                      Long
distance carriers:

 

i)                                          Call
routing capabilities:

 

90

 

j)                                          How
do you prioritize jobs/clients

 

k)                                       How
long do changes take to implement:

 

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

 

m)                                    System
constraints:

 

Quality Control

 

1.     Are any employees assigned
solely to Quality Control?

 

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

 

a.               Marketing (development
and delivery)

 

b.              Enrollment –

 

c.               Customer
Service/Sales Verification:

 

d.              Is quality checked
during every stage of production?

 

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

 

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

 

Facilities:

 

1.                                       Type
of construction:

 

2.                                       Number
of Stories:

 

	
  3.

  	
  Window Locations:

  	
   

  	
  Are they alarmed?

  
	
   

  	
   

  	
   

  	
   

  
	
  4.

  	
  Only Occupant?

  	
   

  	
  If Not:

  

 

Describe how Separated from other Tenants:

 

5.                                       Fire
Detection Alarms?

 

	
  6.

  	
  Automatic Sprinkler System?

  	
  Yes  o

  	
  No  o

  
	
   

  	
  Flotation Alarms?

  	
  Yes  o

  	
  No  o

  
	
   

  	
  Heat Detectors?

  	
  Yes  o

  	
  In IT area  o

  

 

7.                                       Location
of Parking Area:

 

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

 

8.                                       Entrances:
Number and locations of people doors:

 

	
  i.)

  	
  Are they double doored (man traps)?:

  	
   

  
	
   

  	
   

  	
   

  
	
  ii.)

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

  
	
   

  	
   

  	
   

  
	
   

  	
  Yes 
  o

  	
  No  o        

  	
  How?

  	
   

  
	
   

  	
   

  	
   

  
	
  iii.)

  	
  Are doors electrically alarmed?          

  	
  If so,
  where:          

  
	
   

  	
   

  	
   

  
	
  iv.)

  	
  Is a receptionist protected from an armed intruder?

  	
  Yes  o

  	
  No  o

  	
   

  
							

 

91

 

How?                                                   

 

b.                           How
many freight doors?

 

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

 

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

 

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

 

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

 

v.)                                  Are
doors electrically
alarmed?                                  

To where?                                                                    

 

vi.)                               Are
loading docks raised above ground
level?                                     

 

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

 

9.             Does firm utilize
more than one building?

 

10.                                 Is
plant owned or leased?

 

Security

 

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

If so,

 

a)        Type of
construction:                                   

 

b)       Size in square
feet:                                   

 

c)        Type of
door:                                   

 

d)       Is vault
alarmed?                               To
where?                                    

 

e)        Are Tapes and Checks
awaiting use stored
there?                                   

 

f)          Who has access to
vault?                                   

 

g)       Is it entered under dual
control?                                   

 

h)       Is access
logged?                                   

 

i)           How often are logs
audited & by
whom?                                   

 

2.                                       Does the plant
have a
shredder?                                   

 

a)        Is waste shredded
daily?                                   

 

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

 

3.                                       Does the plant
employ security
guards?                                   

 

If so,

 

92

 

a)        Are they
armed?                                   

 

b)       How many per shift?
                                   

 

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

 

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

 

e)        Do they have radio
contact?                                   

 

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

 

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

 

 

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

 

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

 

6.                                       Are
employees bonded?

 

Explain
process                                                                      

 

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

 

How would an intruder be
detected?                                   

 

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

 

Alarm Devices

 

1.                                       Does
plant have any electric alarm alert
systems?                                   

If so,

 

a)              Is it monitored by a
private security
firm?                                   

 

b)             Does alarm go
directly to local police departments?
                                   

 

c)              Distance to local
police department? 

 

d)             Are all doors
alarmed?
                       All
windows
alarmed?                            

 

e)              Does the building
have panic or holdup
alarms?                                   

 

If so, where
does the signal
go?                                   

 

f)                Does building have
motion
detectors?                                   

 

g)             Are heat or smoke
detectors utilized?                                   

 

If so, who
monitors?                                   

 

h)             Does fire alert go
directly to fire
departments?                                   

 

i)                 Distance to local
fire
station?                                   

 

93

 

j)                 Are TV cameras
utilized?                                   

 

If so, do they
cover

 

	
  i.)

  	
  Parking Lot

  	
  Yes

  	
  o

  	
  No

  	
  o

  
	
  ii.)

  	
  Exterior of Entrance

  	
  Yes

  	
  o

  	
  No

  	
  o

  
	
  iii.)

  	
  Vault

  	
  Yes

  	
  o

  	
  No

  	
  o

  
	
  iv.)

  	
  Interior Work Space

  	
  Yes

  	
  o

  	
  No

  	
  o

  
	
  v.)

  	
  Other

  	
  Yes

  	
  o

  	
  No

  	
  o

  

 

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

Alternate
power source
is?                                   

 

l)                 Does vault have a
separate
alarm?                                   

 

Information Systems

 

1.                                       Forms
of connectivity:

 

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

 

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

 

Backup procedures and disaster recovery plans:

 

94

 

	
   

  	
  Question

  	
   

  	
  Operational
  Definitions

  	
   

  	
  Answer

  	
   

  	
  Service Provider Comments

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  General
  Information

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

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

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1

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

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2

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

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3

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

  	
   

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

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4

  	
  The responses in this document must be reviewed &
  approved by an executive within your company.

  Please list the
  name, position & email address of the Executive, that will be certifying
  this document (see question 90)

  	
   

  	
  Executive Level: (Company Officer)

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5

  	
  What are the names, positions & email addresses of the privacy
  & security leaders
  for your business?

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  All questions below apply to each company
  and/or division that may be providing products or services for GECF.

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  6

  	
  How many employees does your company have?

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7

  	
  Are any of your locations outside the United States?

  	
   

  	
  Examples of a Location: Sales offices, warehouses, manufacturing,
  etc.

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  8

  	
  (If yes to
  question 7) Please
  list all locations outside the United States.

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

 

	
  9

  	
  What is the name of your parent company, if applicable?

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Information
  Security & Privacy

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  The objective of this section is to determine
  how a 3rdparty provider will protect GECF information.

   

  	
   

  	
  GECF
  Information:

  •  Personally identifiable consumer information
•  Non-public customer information
•  Intellectual property
•  Confidential GECF business information
•  Confidential GECF employee data

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  10

  	
  Do you provide services to financial institutions?

  o No  o Yes

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  11

  	
  (If yes to
  question 10) For
  your financial institution clients, does your company have a documented
  privacy program that supports requirements to protect your clients' customer
  information?
o No  o Yes

  	
   

  	
  This question does not assume that your company, itself, is
  subject to state & federal privacy & security regulations. Documented Privacy Program: A documented
  privacy program would include written policies and procedures covering: (i)
  ownership of the privacy program; (ii) protecting against impermissible
  sharing of data (i.e., use of information for anything other than customer's
  approved purposes); (iii) use and maintenance of customer information in
  accordance with privacy and security laws; and (iv) reasonable security
  controls for systems and facilities

  	
   

  	
   

  	
   

  	
   

  

 

2

 

	
   

  	
   

  	
   

  	
   (including segregation
  of data, access controls).

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  12

  	
  Do you have documented policies that limit
  system access to a client's information to only those resources that require
  access to service that client?
o No  o Yes

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  13

  	
  Do your existing systems provide tiered
  system access levels that limit access to confidential client information?
o No  o Yes

  	
   

  	
  Tiered System Access Levels: Access rights to
  customer data fields generally should include more than 1 level of access.
  Depending on the services being performed, different users might have read,
  write/update, and delete access to specific data fields.

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  14

  	
  Are there documented controls/procedures in place to ensure you will
  not reuse or share restricted GECF information with other parties or use for
  any purpose other than providing the goods or services to GECF?

  o No  o Yes

  	
   

  	
  Documented Controls/Procedures: The use of: (1) technology, (2) assignment
  of job responsibilities, (3) deployment of controls and (4) training in items
  (1)-(3) to ensure systematic compliance with the limits on use and disclosure
  of restricted GECF information.

  	
   

  	
   

  	
   

  	
   

  

 

3

 

	
  15

  	
  Can you systematically label / flag GECF
  information that you cannot reuse or share with other parties?
o No  o Yes

  	
   

  	
  Label / Flag: System codes, special
  databases, special filing arrangements or other methods to label data with
  the relevant restrictions on use and disclosure

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  16

  	
  Do you have a documented security risk assessment process?

  o No  o Yes

  	
   

  	
  Security Risk Assessment Process: A process to identify threats, vulnerabilities,
  attacks, probabilities of occurrence and outcomes. 

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  17

  	
  Do you have a documented security incident
  management process?
o No  o Yes

  	
   

  	
  Documented Process: A set of written
  instructions on how to report a security incident, including who to contact
  and what information is needed. Incident
  Management Process: A process for responding to security incidents
  that includes initial notification methods, escalation procedures, client
  notification, and incident response and investigation. Security Incident Examples:- Facilities
  break-ins- System intrusions- Theft of data-Internal fraud

  	
   

  	
   

  	
   

  	
   

  

 

4

 

	
   

  	
  Laws, Regulations and
  Litigation

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  The objective of this section is to determine
  that all 3rd-party providers have a process for identifying & complying
  with legal & regulatory requirements.

  (PRIMARY CONTACT MUST CONSULT WITH LEGAL COUNSEL IN ANSWERING
  THESE QUESTIONS)

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  18

  	
  Does your business have a documented process to maintain a current
  list of legal & regulatory requirements that govern the services to be
  provided to GECF?

  o No  o Yes

  	
   

  	
  Examples of requirements:

  •  Telemarketing
  Laws

  •  Privacy Laws

  •  Fair Practices
  Acts

  •  Collections Laws

  •  Truth in
  Advertising

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  19

  	
  Does your business have a documented process to communicate legal
  & regulatory updates to all employees, contractors, subcontractors and
  temporary personnel?

  o No  o Yes

  	
   

  	
  Communicate:

  Communication can be by one or more of several means, including
  regular training, newsletters, e-mails, etc...

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  20

  	
  Is your business required to have a license to provide the proposed
  products or services to GECF?

  o No  o Yes

  	
   

  	
  License: registration with one
  or more state regulatory agencies, such as a state banking or finance
  department, to perform customer service operations (such as payment
  processing, collections, customer service inquiries).

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  21

  	
  (If yes to
  question 20) Is your
  company licensed in all necessary jurisdictions to provide the proposed
  products or services to GECF?
o No  o Yes

  	
   

  	
  All Necessary Jurisdictions: certain states,
  including CA, CT, FL, MD, RI, require state licenses for certain types of
  entities to perform certain customer service operations

  	
   

  	
   

  	
   

  	
   

  

 

5

 

	
  22

  	
  Is your company currently involved in any pending or threatened
  litigation that could have an adverse impact on the ability to provide
  products or services to GECF or how those service would be provided?

  o No  o Yes

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  23

  	
  Is your company currently involved in any regulatory inquiries that
  could have an adverse impact on the ability to provide products or services
  to GECF or how those products or services would be provided?

  o No  o Yes

  	
   

  	
  Regulatory Inquiries: Investigations,
  complaints or inquiries by federal or state agencies, including attorney
  general offices and regulatory agencies such as the FTC.

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  24

  	
  Does your company have a documented process to proactively investigate
  & monitor intellectual property (IP) rights of technologies that your
  company either owns or uses?

  o No  o Yes

  	
   

  	
  There should be a process by which the service provider can
  meaningfully represent in the contract that it has all necessary rights to
  the intellectual property being used in the provision of products or services
  to GECF.

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  25

  	
  Is your company currently involved in any pending or threatened
  intellectual property disputes that could have an adverse impact on the
  ability to provide products or services to GECF or how those products or
  services would be provided?

  o No  o Yes

  	
   

  	
  Pending or Threatened IP Disputes: Pending
  litigation or a threat that alleges that you do not have the right to use
  certain intellectual property which will be used in the provision of services
  to GECF.

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  26

  	
  Is your company subject to any governmental consent orders, consent
  decrees or enforcement actions?

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Disaster Recovery

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  The objective of this section is to determine
  that all 3rd-party providers have plans in place to mitigate service
  disruptions for all products and services that may be provided to GECF.

  	
   

  	
  Service disruption: A break in the
  scheduled delivery of the product or service

  	
   

  	
   

  	
   

  	
   

  

 

6

 

	
  27

  	
  Do you have a completed & documented disaster recovery plan (DRP)
  in effect that mitigates any potential service disruptions as related to
  products or services that may be provided to GECF?

  o No  o Yes

  	
   

  	
  DRP: Actions taken to
  mitigate the disruption across the entire business that enables a 3rd-party
  provider to deliver products or service to their customers. (The scope must
  cover the entire business process across all business functions as related to
  products or services that may be provided to GECF.)Completed: A plan that has been approved by executive level
  management & implemented.

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  28

  	
  Is your DRP based on an industry accepted risk assessment methodology?

  o No  o Yes

  	
   

  	
  Industry Accepted Risk Assessment: (ISO 9000, FMEA,
  Mission Critical Applications)

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  29

  	
  Do you electronically store your data related to products or services
  that may be provided to GECF?

  o No  o Yes

  	
   

  	
  Example: (Tapes, 3290, Fiche)

  Your Data: For questions (27-32)
  specifically references

  Your internal
  business process data.

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  30

  	
  (If yes to
  question 29) Does
  your DRP include backup & recovery strategies for your data related to
  products or services that may be provided to GECF?
o No  o Yes

  	
   

  	
  Backup & Recovery Strategies: Backup &
  recovery process that supports your company's internal business process.

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  31

  	
  (If yes to
  question 29) Are
  electronic backups of your data stored with a 3rd-Party data storage company?
o No  o Yes

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

7

 

	
  32

  	
  Do you have hard copy files of your data related to products or
  services that may be provided to GECF?

  o No  o Yes

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  33

  	
  (If Yes to
  question 32) Does
  your DRP include backup & recovery strategies for hard copy files of your
  data related to products or services that may be provided to GECF?
o No  o Yes

  	
   

  	
  Hard Copy File: A physical document

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  34

  	
  (If yes to
  question 32) Are
  hard copy files of your data stored with a 3rd-Party data storage company?
o No  o Yes

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  35

  	
  Will you electronically store GECF information?

  o No  o Yes

  	
   

  	
  Example: (Tapes, 3290, Fiche) For questions (33-38) "Will" means effective upon engagement as a GECF
  product or service provider

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  36

  	
  (If yes to
  question 35) Will
  your DRP include backup & recovery strategies for GECF information?
o No  o Yes

  	
   

  	
  Backup & Recovery Strategies: Backup & recovery process that supports
  your company's internal business process.

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  37

  	
  (If yes to
  question 35) Will
  your electronic backups of GECF information stored with a 3rd-Party data
  storage company?
o No  o Yes

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  38

  	
  Will you have hard copy files of GECF information?

  o No  o Yes

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  39

  	
  (If yes to
  question 38) Will
  your DRP include backup & recovery strategies for hard copy files of GECF
  information?
o No  o Yes

  	
   

  	
  Hard Copy File: A physical document

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  40

  	
  (If yes to
  question 38) Will
  hard copy files of GECF information be stored with a 3rd-Party data storage
  company?
o No  o Yes

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

8

 

	
  41

  	
  Does your DRP include alternative suppliers that are pre-qualified & can promptly be engaged in the event
  of a service disruption?
o No  o Yes

  	
   

  	
  Alternative
  Suppliers: Suppliers
  capable of providing similar products or services. 

  Pre-qualified: Suppliers' capability already assessed by
  your company to be acceptable

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  42

  	
  Does your DRP include redundant systems or processes that can be promptly enabled in the event of a service
  disruption?
o No  o Yes

  	
   

  	
  Redundant Systems/Processes: a back up system/process with capacity and
  functionality to deliver the product or service to GECF, in the absence of
  the primary system.

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  43

  	
  Does your DRP include a communication plan for regular communication
  to your affected customers during a service disruption?

  o No  o Yes

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  44

  	
  Do you have a dedicated resource assigned as the DRP owner?

  o No  o Yes

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  45

  	
  Does the DRP owner report on DRP to an executive level employee or
  executive level committee?

  o No  o Yes

  	
   

  	
  Executive Level: reports directly to the President or CEO of
  your company

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  46

  	
  Do you have a documented process as part of your DRP to review and update your plan for changes to your
  business processes?
o No  o Yes

  	
   

  	
  Documented: written document that includes the key requirements for the process,
  how you execute the process and who is the owner of the process.

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  47

  	
  Do you test changes to your DRP?

  o No  o Yes

  	
   

  	
  Test: a simulation of a service disruption in which you execute your DRP to
  meet or exceed you established performance criteria.

  	
   

  	
   

  	
   

  	
   

  

 

9

 

	
  48

  	
  If there are no changes to your DRP within a year (12 month period), do you test your disaster recovery
  plans annually?
o No  o Yes

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Facilities

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  The objective of this section is to determine
  that 3rd-party providers have reasonable measures in place to physically
  secure confidential information.

  	
   

  	
  Reasonable Measures:

  Systems & processes that protect access to facilities that
  contain confidential information.

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  49

  	
  Do you have a physical facilities security program for all locations
  that will process or house GECF information?

  o No  o Yes

  	
   

  	
  Physical Facilities Security Program: To includes access control
  for employees, contractors, subcontractors, temporary personnel &
  visitors 

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  50

  	
  Does your business use or intend to use subcontractors to provide products or services to GECF?
o No  o Yes

  	
   

  	
  Subcontractors:  a
  3rd-party provider that your company has engaged to deliver products &
  services to GECF.

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  51

  	
  (If yes to
  question 50) Do your
  subcontractors have a physical facilities security program for all locations
  that will process or house GECF information?
o No  o Yes

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  52

  	
  Do you have restricted access to internal data rooms which will
  process or house GECF information?

  o No  o Yes

  	
   

  	
  Data room: Server room or hard
  copy file archive

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  53

  	
  Do you have restricted access to phone closets which will process or
  house GECF information?

  o No  o Yes

  	
   

  	
  Phone Closet: A closet which houses
  telecommunication wiring & telecom wiring equipment (Voice & Data)

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  54

  	
  Do you have access control processes which require employees,
  contractors, subcontractors & temporary personnel to physically present
  badges to obtain access to all locations that will process or house GECF
  information?

  o No  o Yes

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

10

 

	
  55

  	
  Do you have a visitor access control process?

  o No  o Yes

  	
   

  	
  Visitor: Anyone who is not an
  employee, or a contractor, subcontractor, temporary resource employed at the
  site Visitor Access Control Process:
  Visitors are escorted in your facilities, & a visitor reconciliation
  process exists

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  56

  	
  Is access to your facilities revoked for all terminated employees,
  contractors, subcontractors & temporary personnel within a 48 hour
  period?

  o No  o Yes

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  57

  	
  Do you have a documented process to destroy all physical media that
  contains your confidential information & the confidential information of
  your clients after it is no longer actively used or actively archived?

  o No  o Yes

  	
   

  	
  Examples of Physical Media:- Paper- Tapes-
  Fiche- Embossing Foil.....Destroy:
  To make unreadable & unusable

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  58

  	
  Do you utilize a 3rd-party provider for physical media destruction?

  o No  o Yes

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  59

  	
  Do you have a documented process to destroy all electronic media that
  contains your confidential information & the confidential information of
  your clients after it is no longer actively used or actively archived?

  o No  o Yes

  	
   

  	
  Examples of Electronic
  Media:

  •  Chip Sets

  •  Electronic
  storage devices

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  60

  	
  Do you utilize a 3rd-party provider for electronic media destruction?

  o No  o Yes

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  61

  	
  Do you audit your 3rd-party providers for electronic & physical
  media destruction?

  o No  o Yes

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Personnel

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  The objective of this section is to determine that
  the 3rd-party provider has appropriate processes & procedures for hiring,
  training & monitoring employees.

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  62

  	
  Are all new hires subject to Federal Criminal background checks
  covering the last 10 years?

  o No  o Yes

  	
   

  	
  New Hires: All employees,
  contractors & Temporary personnel

  	
   

  	
   

  	
   

  	
   

  

 

11

 

	
  63

  	
  Are all new hires subject to State Criminal
  background checks covering
  the last 10 years?

  o No  o
  Yes

  	
   

  	
  State Criminal Background Requirements: Must be executed for all states &
  counties in which the individual has resided and / or worked

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  64

  	
  Are all new hires subject to credit bureau checks?

  o
  No  o
  Yes

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  65

  	
  Are all new hires subject to employment verification?

  o
  No  o
  Yes

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  66

  	
  Are all new hires subject to education
  verification?
o
  No  o
  Yes

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  67

  	
  Are all US based new hire employees subject to drug tests?

  o
  No  o
  Yes

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  68

  	
  Do you provide services to financial institutions?

  o
  No  o
  Yes

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  69

  	
  (If yes to
  question 68) For
  your financial institution clients, Do you require formal privacy & security
  training for your employees with access to their confidential information?
o No  o
  Yes

  	
   

  	
  Privacy & Security Training: Classroom or Computer Based Training
  covering privacy laws & appropriate handling of confidential information

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  70

  	
  (If yes to
  question 68) Do you
  require annual privacy & security training?
o No  o
  Yes

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  71

  	
  Will your employees, contractors or
  temporary personnel directly interact with GECF customers?
o No  o
  Yes

  	
   

  	
  GECF Customers: Cardholders & / or clients of GECF

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  72

  	
  (If yes to
  question 71) Are
  employees, contractors & Temporary personnel who will directly interact
  with GECF customers subject to quality assurance monitoring for compliance
  & service level requirements?
o No  o
  Yes

  	
   

  	
  Examples
  of Monitoring:

  •  Call monitoring
•   Mystery
  shopping
•   Customer
  satisfaction surveys

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  73

  	
  Does your company comply with the Fair Labor Standards Act (FLSA) or
  equivalent Employment standards acts if not based in the US?

  o
  No  o
  Yes

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

12

 

	
  74

  	
  Does your company have a documented policy
  & process that complies
  with environmental health & safety regulations
o No  o
  Yes

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Subcontracting

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  The objective of this section is to
  determine that the 3rd-party provider has appropriate processes &
  procedures for engaging, training & monitoring contractors,
  subcontractors & temporary personnel.

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  75

  	
  Does your business use or intend to use subcontractors to provide products
  or services to GECF?

  o
  No  o
  Yes

  	
   

  	
  Subcontractors: a 3rd-party provider that
  your company has engaged to deliver products & services to GECF. Note: If the answer to this
  question is “No”, you may skip to the finance section

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  76

  	
  (If yes to
  question 75) Are any
  of your subcontracted service providers on the OFAC list?
o No  o
  Yes

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  77

  	
  (If yes to
  question 75) Do you
  have a documented security incident management process for subcontractors? 
o No  o
  Yes

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  78

  	
  Will your subcontractors have access to GECF information?

  o
  No  o
  Yes

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  79

  	
  (If yes to
  question 78) Are
  subcontractors who will access to GECF information subject to the same
  background checks as your permanent employees who have access to GECF information?
o No  o
  Yes

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  80

  	
  (If yes to
  question 78) Do you
  require formal privacy & security training for contractors,
  subcontractors and temporary personnel who will have access to GECF
  information?
o No  o
  Yes

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  81

  	
  (If yes to
  question 78) Do you
  require annual privacy & security training?
o No  o
  Yes

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

13

 

	
  82

  	
  Will GECF information be passed to
  a 3rd-party managed IT system?

  o
  No  o
  Yes

  	
   

  	
  3rd-Party Managed IT System: Database or other
  technology systems that are maintained by a contracted supplier 

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  83

  	
  (If yes to
  question 82) Will
  you actively monitor the security of outsourced IT systems?
o No  o
  Yes

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  84

  	
  (If yes to
  question 82) Will
  you actively monitor the transfer, storage & disposal of GECF information?
o No  o
  Yes

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  85

  	
  Will your subcontractors directly interact with GECF customers?

  o
  No  o
  Yes

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  86

  	
  (If yes to
  question 85) Are
  subcontractors who will directly interact with GECF customers subject to
  quality assurance monitoring for compliance & service level requirements?
o No  o
  Yes

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Finance

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  The objective of this section is to determine if
  there are sound financial practices & controls in place?

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  87

  	
  Does your company prepare stand-alone financial statements?

  o
  No  o
  Yes

  	
   

  	
  Stand-Alone: Separate set of financial
  statements for your division, subsidiary, company or enterprise

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  88

  	
  (If yes to
  question 87) Have
  you received an unqualified audit opinion letter from your independent
  accounting firm in each of the last 3 years?
o No  o
  Yes

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  89

  	
  Do you have a parent company?

  o
  No  o
  Yes

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  90

  	
  (If yes to
  question 89) Does
  your parent company prepare stand-alone financial statements?
o No  o
  Yes

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

14

 

	
  91

  	
  (If yes to
  question 90) Have
  you received an unqualified audit opinion letter from your independent
  accounting firm in each of the last 3 years?
o No  o
  Yes

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  92

  	
  Does either your company or your parent company prepare a SAS70 or
  have an independent 3rd-party review of internal controls?

  o
  No  o
  Yes

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Certification

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Are the responses provided in this document accurate & complete to
  the best knowledge of the 3rd-party provider executive (listed above), based
  upon investigation & review with those management individuals who have
  responsibility for the business processes & issues evaluated in this
  questionnaire?

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

15

 

Schedule
14

Benchmarking

 

1                                      The
first benchmarking exercise shall be undertaken by an organisation recognised
as having benchmarking capability (the “Benchmarking Adviser”). The following provisions
shall apply in respect of the selection of the Benchmarking Adviser:

 

1.1                            GECC
shall identify three potential candidates to act as the Benchmarking Adviser.
GEFA shall then eliminate one of the three choices and GECC shall choose which
of the remaining candidates shall become the Benchmarking Adviser.

 

2                                      The
Parties shall bear the costs of the first benchmarking exercise in equal shares
and GEFA shall bear the costs of all subsequent benchmarking exercises.

 

3                                      The
Benchmarking Adviser shall be required to submit to the parties the name(s) and
curriculum vitae of its personnel proposed to be deployed on this matter and
the estimated costs (which shall be reasonable). Each Party shall have the
right to object to the deployment of proposed personnel and to require the
Benchmarking Adviser to propose (and submit particulars of) alternative
personnel, provided that the reasons for its objections are reasonable, and are
supplied to the other Party and the Benchmarking Adviser in writing within five
Business Days of the parties receiving the particulars of the personnel. GEFA
shall have the right to object to the estimated costs and to negotiate such
costs. The Benchmarking Adviser shall be required to enter into a
confidentiality agreements with GECF and GEFA on no less onerous terms than
those which apply to the Parties under this agreement.

 

4                                      In
order that there are no ambiguities in relation to each Party’s understanding
of how the benchmarking activity is to be undertaken, its findings interpreted
and any resulting actions taken, the Benchmarking Adviser will be instructed to
conduct the benchmarking activity in accordance with a set of instructions (the
“Benchmarking
Terms of Reference”). GECC will prepare the first draft of the
Benchmarking Terms of Reference and deliver it to GEFA. GECC and GEFA shall
endeavour to agree the Benchmarking Terms of Reference (acting reasonably and
in good faith). If GECC and GEFA are unable to agree the Benchmarking Terms of
Reference within 10 Business Days of the date on which the first draft was
delivered to GEFA, either party may request the Benchmarking Adviser to prepare
a draft Terms of Reference. Neither party shall unreasonably withhold or delay
its approval of the draft Benchmarking Terms of Reference prepared by the
Benchmarking Adviser. Following agreement of the Benchmarking Terms of
Reference, a representative of each Party shall sign the Benchmarking Terms of
Reference, which shall then be delivered to the Benchmarking Adviser.

 

5                                      As
a minimum, the Benchmarking Terms of Reference will instruct the Benchmarking
Adviser to gather in each Territory, using generally accepted benchmarking
processes, the following information in respect of at least five members of the
Benchmarking Pool (or where there are not five members of the Benchmarking
Pool, then as many as is reasonably practicable) in the relevant Territory at
that time:

 

5.1                            types
of Payment Protection Products offered to consumers;

 

5.2                            features
of Payment Protection Products offered to consumers including:

 

 

(a)                                marketing channels
(including direct mail, inbound and outbound telemarketing, email and internet
campaigns);

 

(b)                               details of types of
cover;

 

(c)                                details of benefit;

 

(d)                               consumer price and
mechanism for charging consumer;

 

(e)                                length of time on the
market; and

 

(f)                                  such other
information as agreed between the Parties.

 

5.3                            The
Benchmarker shall set out the information gathered in a report (the “Benchmarking
Report”).

 

6                                      In
respect of each six-monthly benchmarking exercise carried out after the first
benchmarking exercise, GEFA shall gather the information set out in paragraphs
5.1 and 5.2 above. For the avoidance of doubt, the Benchmarking Adviser shall
not be involved in any Benchmarking Exercise subsequent to the first
Benchmarking Exercise. If the Parties agree to involve the Benchmarking Adviser
in a Subsequent Benchmarking Exercise, the Parties shall bear the costs
equally.

 

7                                      The
Parties shall, within a reasonable time, assess, in the light of the
information provided in accordance with paragraph 5 or paragraph 6 as
appropriate, whether there are any Payment Protection Products or features of
Payment Protection Products that are offered by GECF Group Companies’
Competitors to consumers in the relevant Territory but that the relevant GEFA
Company does not offer to the relevant GECF Group Company.

 

8                                      For
the avoidance of doubt the information specific to GECC in any and all
Benchmarking Reports and Product Development Plans produced under this
agreement shall be treated in the same way as if it were Confidential
Information disclosed by a party under the agreement.

 

9                                      If:

 

9.1                            GECC
considers that the information provided by GEFA in accordance with paragraph 6
does not provide an accurate view of the market for Payment Protection Products
in the relevant Territory; or

 

9.2                            the
Parties are not able to agree on the assessment carried out under paragraph 7;
or

 

9.3                            the
Parties are not able to agree a Product Development Plan in accordance with
Clause 9.4.4,

 

then Clause 15
of this agreement shall apply

 

2

 

Schedule
15

Potential Substitute Business

 

Criteria for determining when
Potential Substitute Business becomes Substitute Business

 

The Parties agree that any
substitute Payment Protection Products which directly replace the Existing
Business will be Substitute Business and will be subject to the existing terms,
both the Retention Rate and Profit Share as set out in Schedule 1 and the Local
Agreements.

 

The Parties agree that the
following scenarios shall fall within or outside the definition of Substitute
Business, as set out below.  This is not
an exhaustive list and any additional scenarios that may arise from time to
time will be agreed between the senior management of GEFA and GECC centrally.

 

Furthermore, if the senior
management of GEFA and GECC centrally agree a Payment Protection Product is
partly Substitute Business and partly New Business, they will agree terms based
on a weighted average of the Existing Business and New Business terms.

 

	
  Scenario

  	
   

  	
  Type of Business

  	
   

  	
  Exceptions

  
	
  Any
  modification to Existing Business its terms, conditions or exclusions whether
  a minor change is made or a change in benefits to meet GECC finance
  agreements by modification to cover or an addition or removal of a cover
  section or sections.

  	
   

  	
  Is
  Substitute Business

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Resolicitation
  activity GEFA currently does not offer on the back of Existing Business.  “Resolicitation” means resolicitation
  activity in the marketing of a Payment Protection Product by mail or phone to
  uninsured GECC finance customers who have not opted to purchase the GEFA
  Payment Protection Product at the point of sale of the finance agreement.

  	
   

  	
  Is New
  Business

  	
   

  	
  If GECC
  intends to replace the Existing Business provided at initial point of sale of
  the finance agreement with a Resolicitation Payment Protection Product it
  will be Substitute Business and GECC will advise GEFA of its intent.  If GECC stops actively promoting the
  Existing Business provided at the initial point of sale of the finance agreement
  by means of training or account management or incentives or other method
  which adversely impacts on the Existing Business performance, measured by
  insurance penetration of the Existing Business, then any Resolicitation
  Scheme will be restructured as Substitute Business with the appropriate
  Retention Rate and Profit Share terms applied.

  

 

3

 

	
  Scenario

  	
   

  	
  Type of Business

  	
   

  	
  Exceptions

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  A joint
  borrower cover Payment. Protection Product where GEFA currently only offers a
  single cover Payment Protection Product.

  	
   

  	
  Is
  Substitute Business for the first named principal borrower.  Is New Business for the second named
  borrower.

  	
   

  	
  As GEFA
  cannot split terms within one Payment Protection Product, aggregate terms will
  be provided combining the proportion of the Risk Rate allocated to the first
  named principal borrower and the second named borrower.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  New GECC
  business partnership.  This shall
  include new partnerships with retailers, dealers or broker groups.

  	
   

  	
  Is New
  Business

  	
   

  	
  It is not
  intended to include individual additions of a retailer, dealer or broker
  which will be provided with terms as Substitute Business, unless a separate
  Scheme is required.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  A Payment
  Protection Product offered to an age range excluded from Existing Business or
  other Payment Protection Product targeting another specific group of
  customers not currently provided under Existing Business.

  	
   

  	
  Is New
  Business

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Committed
  Payments Products designed to protect in whole or in part GECC finance
  commitments if they are in replacement of Existing Business.

  	
   

  	
  Is
  Substitute Business

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Committed
  Payments Products not designed to protect GECC finance commitments.

  	
   

  	
  Is New
  Business

  	
   

  	
   

  

 

4

 

	
  Scenario

  	
   

  	
  Type of Business

  	
   

  	
  Exceptions

  
	
  A Payment
  Protection Product provided for a new and distinct GECC finance activity
  including any new and distinct loan product, which does not replace an
  existing loan product, offered by GECC.

  	
   

  	
  Is New
  Business

  	
   

  	
  Any Payment
  Protection Product provided to a new or distinct loan product, which replaces
  an existing loan product, will be Substitute Business.  If the new loan product increases the
  volume of Existing Business’s Gross Written Premium then blended terms will be
  agreed.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Acquired
  GECF Business.

  	
   

  	
  Is New
  Business

  	
   

  	
  If Existing
  Business is transferred to the Acquired GECF Business, the terms for the
  Existing Business will remain unchanged.

  

 

5

 

Schedule
16

Business Proposal Pricing Process

 

Part I

 

1                                      Where:

 

1.1                            GECC
or any GECF Group Company request an Offering pursuant to Clause 9.4.4 and such
an Offering described in the relevant Product Development Plan constitutes
Potential Substitute Business; or

 

1.2                            paragraph
9.2 of Part A of Schedule 5 applies and the Parties need to determine the
pricing of a New Business Proposal or Amended New Business Proposal,

 

the procedure
set out in this Schedule shall apply.

 

2                                      Where
the Offering, New Business Proposal or Amended Business Proposal as appropriate
(in any case the “Business Proposal”):

 

2.1                            does
not include the establishment of a new form of distribution channel for the
relevant Payment Protection Product (a “New Channel”), the process set out in Part
II of this Schedule shall apply; or

 

2.2                            does
involve a New Channel for the relevant Payment Protection Product then the
process set out in Part III of this Schedule shall apply.

 

PART II

 

3                                      Where
the Business Proposal does not include a New Channel, GEFA or the relevant GEFA
Company will provide GECC or the relevant GECF Group Company with a pricing
proposal for the Business Proposal. The pricing proposal shall comprise two
elements (i) the Retention Rate as has already been agreed by the Parties for
the relevant Payment Protection Product as set out in Schedule 1 of this
agreement (for Potential Substitute Business) or Clause 5 of this agreement
(for Potential New Business) as the case may be; and (ii) the Risk Rate.

 

4                                      Where
GECC or the relevant GECF Group Company agrees to the pricing proposal, then
the Parties shall proceed to implement the Product Development Plan.

 

5                                      Where
GECC or the relevant GECF Group Company does not agree to the pricing proposal,
then the dispute shall be referred to the dispute resolution process set out in
Clauses 15.2 of the agreement. If the Parties are not able to resolve the
dispute within 10 Business Days of the matter being referred to the dispute
resolution process then either Party may refer the pricing proposal to Watson
Wyatt or other independent actuary as agreed by the Parties (the “Actuary”).
The Actuary shall determine the price by calculating the Risk Rate. The Actuary
shall act as an Expert and not as an arbitrator and the Actuary’s decision
shall be final and binding on the parties. The Actuary shall then determine his
own pricing proposal for the Business Proposal. Either Party shall be entitled
to receive a copy of the assumptions upon which the Actuary determined the Risk
Rate.

 

6                                      Where
the Parties refer the matter to the Actuary, the price shall be calculated by
adding the Risk Rate as determined by the Actuary to the Retention Rate. Where:

 

6.1                            the
Parties agree to the price, then the Parties will proceed to implement the
Business Proposal and (where the New Business Proposal is a New Business
Proposal or Amended

 

6

 

Business Proposal) the terms of Paragraphs 10
and 11 of Part A of Schedule 5 shall apply; or

 

6.2                            GECC
or the relevant GECF Company does not accept the price, then the Product
Development Plan will be abandoned; or

 

6.3                            GEFA
or the relevant GEFA Company does not accept the price, then (i) GECC and the
relevant GECF Group Company shall have no obligation to appoint GEFA or any
GEFA Company as its provider, whether exclusive or otherwise, for the relevant
Local Agreement in respect of the Business Proposal and (ii) GECC shall be free
to enter into discussions, tenders, negotiations, arrangements and agreements
with third parties and/or other companies in the GECF Group in respect of the
Business Proposal and (iii) the relevant GECF Group Company shall not be
obliged to invite the relevant GEFA Company to participate in the tender
process but shall provide the relevant GEFA Company with a copy of the tender
documentation.

 

Part III

 

7                                      Where:

 

7.1                            The
Business Proposal does include a New Channel and **.

 

7.2                            Any
increase in the Retention Rate set out in the relevant Local Agreement must **.
GEFA shall provide substantiation for the revised Retention Rate based on a
proposed pricing unit for each premium sold via the New Channel.

 

7.3                            GEFA
shall also provide:

 

7.3.1                   (if
the New Channel is to be provided by GEFA or a GEFA Company directly) the
benchmarked costings of the New Channel; or

 

7.3.2                   (if
the New Channel is to be provided by an outsourced supplier) the relevant
tender documentation for such outsourcing.

 

The pricing
and capabilities offered by GEFA must be competitive with the benchmarked or
tender costings identified.

 

7.4                            If
the pricing and capabilities offered by GEFA pursuant to paragraph 7.3 are
competitive and the Risk Rate is accepted by GECC, then the Parties shall
finalise the terms of the addendum to the Local Agreement or, where relevant,
the terms of a New Local Agreement.

 

8                                      Where
GECC or the relevant GECF Group Company does not agree to the proposed revised
Retention Rate then the matter will be referred to the dispute resolution
process set out in Clause 15.

 

9                                      Where:

 

9.1                            GECC
or the relevant GECF Group Company agrees to the revised Retention Rate and the
Risk Rate proposed by GEFA, then the Parties shall proceed to implement the
Product Development Plan, or

 

9.2                            GECC
or the relevant GECF Group Company does not agree to the Risk Rate, then the
dispute shall be referred to the dispute resolution process set out in Clause
15.2 of the agreement. If the Parties are not able to resolve the dispute
within 10 Business Days of the matter being referred to the dispute resolution
process then either Party may refer the dispute to the Actuary. The Actuary
shall determine the price by calculating the Risk Rate.

 

7

 

The Actuary shall act as an Expert and not as an arbitrator and the
Actuary’s decision shall be final and binding on the parties. The Actuary shall
then determine his own pricing proposal for the Business Proposal. Either Party
shall be entitled to receive a copy of the assumptions upon which the Actuary
determined the Risk Rate.

 

10                               Where
the Parties refer the matter to the Actuary, the price shall be calculated by
adding the Risk Rate as determined by the Actuary to the revised Retention
Rate.

 

Where:

 

10.1                     the
Parties agree to the price, then the Parties will proceed to implement the
Business Proposal and (where the Business Proposal is a New Business Proposal
or Amended Business Proposal) the terms of Paragraphs 10 and 11 of Part A of
Schedule 5 shall apply; or

 

10.2                     GECC
or the relevant GECF Company does not accept the price, then the Product
Development Plan will be abandoned; or

 

10.3       GEFA
or the relevant GEFA Company does not accept the price, then (i) GECC and the
relevant GECF Group Company shall have no obligation to appoint GEFA or any
GEFA Company as its provider, whether exclusive or otherwise, for the relevant
Local Agreement in respect of the Business Proposal and (ii) GECC and the
relevant GECF Group Company shall be free to enter into discussions, tenders,
negotiations, arrangements and agreements with third parties and/or other
companies in the GECF Group in respect of the Business Proposal and (iii) the
relevant GECF Group Company shall not be obliged to invite the relevant GEFA
Company to participate in the tender process but shall provide the relevant
GEFA Company with a copy of the tender documentation.

 

8

 

TABLE OF CONTENTS

 

	
  1

  	
  Definitions And Interpretation

  	
   

  
	
   

  	
   

  	
   

  
	
  2

  	
  Local
  Agreements

  	
   

  
	
   

  	
   

  	
   

  
	
  3

  	
  Exclusive Appointment

  	
   

  
	
   

  	
   

  	
   

  
	
  4

  	
  Regulatory Requirements

  	
   

  
	
   

  	
   

  	
   

  
	
  5

  	
  Financial
  Terms

  	
   

  
	
   

  	
   

  	
   

  
	
  6

  	
  Pricing - Profit Share and Financial
  Performance

  	
   

  
	
   

  	
   

  	
   

  
	
  7

  	
  Marketing

  	
   

  
	
   

  	
   

  	
   

  
	
  8

  	
  Non
  Solicit

  	
   

  
	
   

  	
   

  	
   

  
	
  9

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

  	
   

  
	
   

  	
   

  	
   

  
	
  10

  	
  Intellectual Property, Data and Data Protection

  	
   

  
	
   

  	
   

  	
   

  
	
  11

  	
  Data
  Protection

  	
   

  
	
   

  	
   

  	
   

  
	
  12

  	
  Gross Written Premiums and Collection

  	
   

  
	
   

  	
   

  	
   

  
	
  13

  	
  Cancellations and Cancellation Fees

  	
   

  
	
   

  	
   

  	
   

  
	
  14

  	
  Default
  Interest

  	
   

  
	
   

  	
   

  	
   

  
	
  15

  	
  Relationship Managers, and Informal Dispute
  Resolution and Arbitration

  	
   

  
	
   

  	
   

  	
   

  
	
  16

  	
  Performance Meetings And Report Outs

  	
   

  
	
   

  	
   

  	
   

  
	
  17

  	
  Accounts, Records and Access to Information

  	
   

  
	
   

  	
   

  	
   

  
	
  18

  	
  Assignment, Agents and Sub-Contracting

  	
   

  
	
   

  	
   

  	
   

  
	
  19

  	
  Warranty of Authority

  	
   

  
	
   

  	
   

  	
   

  
	
  20

  	
  Commencement, Term and Termination

  	
   

  
	
   

  	
   

  	
   

  
	
  21

  	
  Consequences
  of Termination

  	
   

  
	
   

  	
   

  	
   

  
	
  22

  	
  Force
  Majeure

  	
   

  
	
   

  	
   

  	
   

  
	
  23

  	
  Confidential Information

  	
   

  

 

 

	
  24

  	
  Waiver

  	
   

  
	
   

  	
   

  	
   

  
	
  25

  	
  Entire
  Agreement

  	
   

  
	
   

  	
   

  	
   

  
	
  26

  	
  Costs and Expenses

  	
   

  
	
   

  	
   

  	
   

  
	
  27

  	
  No
  Partnership

  	
   

  
	
   

  	
   

  	
   

  
	
  28

  	
  Notices

  	
   

  
	
   

  	
   

  	
   

  
	
  29

  	
  Invalidity and Severability

  	
   

  
	
   

  	
   

  	
   

  
	
  30

  	
  Governing Law and Jurisdiction and Appointment
  of Process Agent

  	
   

  
	
   

  	
   

  	
   

  
	
  31

  	
  Exclusion of Third Party Rights

  	
   

  
	
   

  	
   

  	
   

  
	
  Schedule 1 Existing Business

  	
   

  
	
   

  	
   

  	
   

  
	
  Schedule 2 GE Financial Insurance Service
  Level Standards

  	
   

  
	
   

  	
   

  	
   

  
	
  Schedule 3 New Local Agreement Profit Share
  Provisions

  	
   

  
	
   

  	
   

  	
   

  
	
  Schedule 4 Product Performance Monitoring

  	
   

  
	
   

  	
   

  	
   

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

  	
   

  
	
   

  	
   

  	
   

  
	
  Schedule 6 Part A: Framework Agreement
  Performance Meetings

  	
   

  
	
   

  	
   

  	
   

  
	
  Schedule 7 Supplemental Sales Commission

  	
   

  
	
   

  	
   

  	
   

  
	
  **

  	
   

  
	
   

  	
   

  	
   

  
	
  Schedule 8 Local Agreements

  	
   

  
	
   

  	
   

  	
   

  
	
  Schedule 9 GEFA Group Companies

  	
   

  
	
   

  	
   

  	
   

  
	
  Schedule
  10 EXCHANGE RATES

  	
   

  
	
   

  	
   

  	
   

  
	
  Schedule
  11 Form of Local Addendum

  	
   

  
	
   

  	
   

  	
   

  
	
  Schedule
  12 Form of New Local Agreement

  	
   

  
	
   

  	
   

  	
   

  
	
  Schedule
  13 APPROVED SUBCONTRACTORS

  	
   

  
	
   

  	
   

  	
   

  
	
  Schedule
  14 Benchmarking

  	
   

  
	
   

  	
   

  	
   

  
	
  Schedule
  15 Potential Substitute Business

  	
   

  
	
   

  	
   

  	
   

  
	
  Schedule
  16 Business Proposal Pricing Process

  	
   

  

 

2Exhibit 10.27

 

 

 

BUSINESS SERVICES AGREEMENT

 

dated
               ,
2004

 

between

 

GNA CORPORATION

 

and

 

UNION FIDELITY LIFE INSURANCE COMPANY

 

 

 

CONFIDENTIAL TREATMENT REQUESTED

 

CONFIDENTIAL TREATMENT REQUESTED: INFORMATION FOR WHICH CONFIDENTIAL
TREATEMENT HAS BEEN REQUESTED IS OMITTEED AND IS NOTED WITH “**”.

AN UNREDACTED VERSION OF THIS DOCUMENT HAS BEEN FILED

SEPARATELY WITH THE SECURITIES AND

EXCHANGE COMMISSION.

 

 

 

 

 

	
  ARTICLE I

  	
  DEFINITIONS

  	
   

  
	
  SECTION 1.01.

  	
  Certain Defined Terms

  	
   

  
	
  SECTION 1.02.

  	
  Other Terms

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE II

  	
  SERVICES AND TERMS

  	
   

  
	
  SECTION 2.01.

  	
  Services; Scope

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE III

  	
  COSTS AND DISBURSEMENTS

  	
   

  
	
  SECTION 3.01.

  	
  Costs and Disbursements.

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE IV

  	
  STANDARD FOR SERVICE; COMPLIANCE WITH LAWS;
  LIMITED LIABILITY

  	
   

  
	
  SECTION 4.01.

  	
  Standard for Service

  	
   

  
	
  SECTION 4.02.

  	
  Compliance with Laws

  	
   

  
	
  SECTION 4.03.

  	
  Limited Liability

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE V

  	
  DISPUTE RESOLUTION

  	
   

  
	
  SECTION 5.01.

  	
  General Provisions

  	
   

  
	
  SECTION 5.02.

  	
  Consideration by Senior Executives

  	
   

  
	
  SECTION 5.03.

  	
  Mediation

  	
   

  
	
  SECTION 5.04.

  	
  Arbitration

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE VI

  	
  TERMINATION

  	
   

  
	
  SECTION 6.01.

  	
  Termination of the Agreement.

  	
   

  
	
  SECTION 6.02.

  	
  Termination with Respect to Any Reinsured
  Business

  	
   

  
	
  SECTION 6.03.

  	
  Effect of Termination

  	
   

  
	
  SECTION 6.04.

  	
  Survival

  	
   

  
	
  SECTION 6.05.

  	
  Force Majeure

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE VII

  	
  GENERAL PROVISIONS

  	
   

  
	
  SECTION 7.01.

  	
  Subcontractors

  	
   

  
	
  SECTION 7.02.

  	
  Additional Services; Books and Records.

  	
   

  
	
  SECTION 7.03.

  	
  Taxes.

  	
   

  
	
  SECTION 7.04.

  	
  Confidential Information

  	
   

  
	
  SECTION 7.05.

  	
  Non-disclosure; Privilege; Conflicts of
  Interest

  	
   

  
	
  SECTION 7.06.

  	
  Headings and Schedules

  	
   

  
	
  SECTION 7.07.

  	
  Notices

  	
   

  
	
  SECTION 7.08.

  	
  Successors and Assigns

  	
   

  
	
  SECTION 7.09.

  	
  Execution in Counterpart

  	
   

  
	
  SECTION 7.10.

  	
  Currency

  	
   

  
	
  SECTION 7.11.

  	
  Amendments

  	
   

  
	
  SECTION 7.12.

  	
  Governing Law

  	
   

  
	
  SECTION 7.13.

  	
  Entire Agreement; Severability

  	
   

  
	
  SECTION 7.14.

  	
  No Waiver; Preservation of Remedies

  	
   

  
	
  SECTION 7.15.

  	
  Cooperation

  	
   

  

 

 

	
  SECTION 7.16.

  	
  Third Party Beneficiary

  	
   

  
	
  SECTION 7.17.

  	
  Negotiated Agreement

  	
   

  
	
  SECTION 7.18.

  	
  Interpretation

  	
   

  
	
  SECTION 7.19.

  	
  No Right to Set-Off

  	
   

  
	
   

  	
   

  	
   

  
	
  SCHEDULES

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  SCHEDULE
  A

  	
  Services

  	
   

  
	
  SCHEDULE
  B

  	
  Reinsured
  Businesses

  	
   

  
	
  SCHEDULE
  C

  	
  Service
  Charges

  	
   

  
	
  SCHEDULE D

  	
  Business Associate Addendum

  	
   

  

 

ii

 

This Business Services Agreement, dated
         , 2004 (this “Agreement”),
is made by and between GNA CORPORATION, a Washington corporation (“GNA”)
and UNION FIDELITY LIFE INSURANCE COMPANY, an insurance company organized under
the laws of the State of Illinois (the “Company”).

 

RECITALS

 

A.                                   WHEREAS, GNA,
General Electric Company, a New York corporation (“General  Electric”),
and certain of its other affiliates entered into a Master Agreement, dated as
of          , 2004 (the “Master
Agreement”); and

 

B.                                     WHEREAS, it is
contemplated by the Master Agreement that after the date hereof GNA will
continue to perform, or GNA will cause its Subsidiaries and Affiliates to
continue to perform, certain administrative and support services with respect
to the Reinsured Businesses (as defined below) in accordance with the terms and
subject to the conditions set forth herein.

 

NOW, THEREFORE, in consideration of the foregoing and
the mutual agreements contained herein and for other good and valuable
consideration, the receipt and adequacy of which are hereby acknowledged, the
parties hereto hereby agree as follows:

 

ARTICLE
I

 

DEFINITIONS

 

SECTION 1.01.      Certain Defined Terms. 
Unless otherwise defined herein, all capitalized terms used herein shall
have the same meaning as in the Master Agreement.

 

The following capitalized terms used in this Agreement
shall have the meanings set forth below:

 

“CPR Arbitration Rules” shall have the meaning
specified in Section 5.04(a)

 

“GEFA” means GE Financial Assurance Holdings,
Inc.

 

“Governmental Authority” means any foreign or
national government, any state or other political subdivision thereof, and any
entity exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government.

 

“Initial Notice” shall have the meaning
specified in Section 5.02.

 

“Long-Term Care Retroceded Business” means the
long-term care insurance business reinsured by the Company pursuant to those
Reinsurance Agreements identified as numbered items 7 and 8 on Schedule B
hereto.

 

“Reinsurance Agreements” means those
reinsurance agreements relating to the Reinsured Businesses and which are
listed on Schedule B hereto.

 

“Reinsured Businesses” means collectively, the
Long-Term Care Retroceded Business, the Structured Settlement Annuity Reinsured
Business and the Variable Annuity Reinsured Business.

 

 

“Response” shall have the meaning specified in
Section 5.02.

 

“Structured Settlement Annuity Reinsured Business”
means the structured settlement annuity business reinsured by the Company
pursuant to those Reinsurance Agreements identified as numbered items 1 through
6 on Schedule B hereto.

 

“Termination Date” means the effective date of
any termination, in whole or in part, of this Agreement as provided in Section
6.01.

 

“Variable Annuity Reinsured Business” means the
variable annuity business reinsured by the Company pursuant to those
Reinsurance Agreements identified as numbered items 9 and 10 on Schedule B
hereto.

 

SECTION 1.02.      Other Terms.  For
purposes of this Agreement, the following terms have the meanings set forth in
the sections or agreements indicated.

 

	
  Term

  	
   

  	
  Section

  
	
  Affiliate

  	
   

  	
  Master Agreement

  
	
  Agreement

  	
   

  	
  Preamble

  
	
  Closing

  	
   

  	
  Master Agreement

  
	
  Company

  	
   

  	
  Recitals

  
	
  Force Majeure

  	
   

  	
  Master Agreement

  
	
  GE Confidential Information

  	
   

  	
  Master Agreement

  
	
  General Electric

  	
   

  	
  Preamble

  
	
  Genworth Confidential Information

  	
   

  	
  Master Agreement

  
	
  Laws

  	
   

  	
  Master Agreement

  
	
  Master Agreement

  	
   

  	
  Recitals

  
	
  Services

  	
   

  	
  Section 2.01(a)

  
	
  Service Charges

  	
   

  	
  Section 3.01(a)

  
	
  Service Provider

  	
   

  	
  Section 4.03

  
	
  Standard for Services

  	
   

  	
  Section 4.01

  
	
  Subsidiary

  	
   

  	
  Master Agreement

  
	
  Taxes

  	
   

  	
  Section 7.03

  
	
  Third Party Claim

  	
   

  	
  Master Agreement

  

 

ARTICLE
II

 

SERVICES AND TERMS

 

SECTION 2.01.      Services; Scope

 

(a)           During
the period commencing on the date hereof and ending on the Termination Date,
subject to the terms and conditions set forth in this Agreement, GNA shall
perform, or cause its Subsidiaries and Affiliates to perform, with respect to
the Reinsured Businesses the services listed in Schedule A hereto (the “Service(s)”).

 

(b)           The
Services shall include, and the Service Charges reflect charges for, such
maintenance, support, error correction, training, updates and enhancements
normally and

 

2

 

customarily performed by
GNA or its applicable Subsidiaries and Affiliates in connection with providing
such services.

 

(c)           The
Services shall not include any services GNA and its Subsidiaries and Affiliates
performs or causes to be performed pursuant to (i) that certain Transition
Services Agreement, dated as of
         , 2004, by and among
General Electric Company, General Electric Capital Corporation, GEI, Inc.,
GEFAHI, GE Asset Management Incorporated, Genworth Financial, Inc., and GNA or
(ii) the Reinsurance Agreements.

 

ARTICLE
III

 

COSTS AND DISBURSEMENTS

 

SECTION 3.01.      Costs and Disbursements.

 

(a)           As
reimbursement for expenses incurred by GNA and its Subsidiaries and Affiliates
in performing the Services with respect to the Reinsured Businesses, the
Company shall pay to GNA with respect to each calendar month ending after the
Inception Date of each reinsurance agreement listed on Schedule B
hereto, a service charge (the “Service Charges”) in an amount calculated
in accordance with Schedule C hereto, as subsequently adjusted, in part,
in accordance with the methodology and procedures set forth in Schedule C.

 

(b)           GNA
shall deliver an invoice to the Company on a monthly basis in arrears for the
Service Charges due to GNA under this Agreement.  The Company shall pay the amount of such invoice to GNA in U.S.
dollars within seventy-five (75) days of the date of such invoice.  In the event that all or any portion of any
payment due GNA pursuant to this Agreement becomes overdue, the portion of the
amount overdue shall bear interest at an annual rate equal to the then current
thirty (30) day U.S. Treasury Bill discount rate on the date that the payment
becomes overdue plus 200 basis points, for the period that the amount is
overdue.  As soon as practicable after
receipt by GNA of any reasonable written request by the Company, GNA shall
provide the Company with reasonably detailed data and documentation sufficient
to support the calculation of any amount due to GNA under this Agreement for
the purpose of verifying the accuracy of such calculation.  If, after reviewing such data and
documentation, the Company disputes GNA’s calculation of any amount due to GNA,
then the dispute shall be resolved pursuant to Article V.

 

ARTICLE
IV

 

STANDARD FOR SERVICE; COMPLIANCE
WITH LAWS; LIMITED LIABILITY

 

SECTION 4.01.      Standard for Service. 
Except as otherwise provided in this Agreement (including in Schedule A
hereto), GNA shall perform, or cause its Subsidiaries and Affiliates to
perform, the Services (a) in the same manner as they conduct their own
businesses not subject to this Agreement and (b) in accordance with the
administrative performance standards of GNA and its applicable Subsidiaries and
Affiliates in effect on the date hereof, with such revisions to such standards
as are made in the ordinary course (the “Standard for Services”).

 

3

 

SECTION 4.02.      Compliance with Laws. 
GNA shall comply, and shall cause its Subsidiaries and Affiliates to comply,  with all applicable Laws when providing the
Services or when performing obligations under this Agreement.  Nothing in this Agreement shall require GNA
or its Subsidiaries or Affiliates to act or refuse to act other than in
compliance with Law.

 

SECTION 4.03.      Limited Liability. 
Notwithstanding the provisions of Section 4.01, GNA and its Subsidiaries
and Affiliates and their respective directors, officers or employees (or any of
the heirs, executors, successors or assigns of any of the foregoing) (each, a “Service
Provider”) shall have no liability to the Company or its Subsidiaries and
Affiliates in excess of $10,000,000 in the aggregate for any and all claims in
contract, tort or otherwise for or in connection with any breach of its
obligations under this Agreement; provided, however, that such limitation on
liability shall not extend to or otherwise limit any liabilities that result
directly from such Service Provider’s gross negligence or willful misconduct.

 

ARTICLE
V

 

DISPUTE RESOLUTION

 

SECTION 5.01.      General Provisions. 
(a) Any dispute, controversy or claim arising out of or relating to this
Agreement or the validity, interpretation, breach or termination thereof or
otherwise relating to any of the Services performed hereunder (a “Dispute”),
shall be resolved in accordance with the procedures set forth in this Article
V, which shall be the sole and exclusive procedures for the resolution of any
such Dispute unless otherwise specified below.

 

(b)           Commencing
with the request contemplated by Section 5.02, all communications between the
parties or their representatives in connection with the attempted resolution of
any Dispute, including any mediator’s evaluation referred to in Section 5.03,
shall be deemed to have been delivered in furtherance of a Dispute settlement
and shall be exempt from discovery and production, and shall not be admissible
in evidence for any reason (whether as an admission or otherwise), in any
arbitral or other proceeding for the resolution of the Dispute.

 

(c)           In
connection with any Dispute, the parties expressly waive and forego any right
to (i) special, indirect, punitive, incidental or consequential, lost profits,
exemplary, statutorily-enhanced or similar damages, losses or expenses
(provided that any such liability with respect to a Third Party Claim (as
defined in the Master Agreement) shall be considered direct damages) and (ii)
trial by jury.

 

(d)           The
specific procedures set forth below, including but not limited to the time
limits referenced therein, may be modified by agreement of the parties in
writing.

 

(e)           All
applicable statutes of limitations and defenses based upon the passage of time
shall be tolled while the procedures specified in this Article V are
pending.  The parties will take such
action, if any, required to effectuate such tolling.

 

SECTION 5.02.      Consideration by Senior Executives.  If a Dispute is not resolved in the normal
course of business at the operational level, the parties shall attempt in

 

4

 

good faith to resolve
such Dispute by negotiation between executives who hold, at a minimum, the
office of President and CEO of the respective business entities involved in
such Dispute.  Either party may initiate
the executive negotiation process by providing a written notice to the other
(the “Initial Notice”).  Fifteen (15)
days after delivery of the Initial Notice, the receiving party shall submit to
the other a written response (the “Response”). The Initial Notice and the
Response shall include (i) a statement of the Dispute and of each party’s
position, and (ii) the name and title of the executive who will represent that
party and of any other person who will accompany the executive. Such executives
will meet in person or by telephone within thirty (30) days of the date of the
Initial Notice to seek a resolution of the Dispute.

 

SECTION 5.03.      Mediation.  If a
Dispute is not resolved by negotiation as provided in Section 5.02 within
forty-five (45) days from the delivery of the Initial Notice, then either party
may submit the Dispute for resolution by mediation pursuant to the CPR
Institute for Dispute Resolution (the “CPR”) Model Mediation Procedure
as then in effect. The parties will select a mediator from the CPR Panels of
Distinguished Neutrals, but such mediator must
have prior U.S. reinsurance experience either as a lawyer or as a present or
former officer or management employee of a reinsurance company, but not of GNA,
or the Company, or any of their respective affiliates.  Either party at commencement of the
mediation may ask the mediator to provide an evaluation of the Dispute and the
parties’ relative positions.

 

SECTION 5.04.      Arbitration.  (a)
If a Dispute is not resolved by mediation as provided in Section 5.03 within
thirty (30) days of the selection of a mediator (unless the mediator chooses to
withdraw sooner), either party may submit the Dispute to be finally resolved by
arbitration pursuant to the CPR Rules for Non-Administered Arbitration as then
in effect (the “CPR Arbitration Rules”). 
The parties consent to a single, consolidated arbitration for all known
Disputes existing at the time of the arbitration and for which arbitration is
permitted.

 

(b)           The
neutral organization for purposes of the CPR Arbitration Rules will be the CPR.
The arbitral tribunal shall be composed of three arbitrators who are each
experienced in the U.S. reinsurance business, of whom each party shall appoint
one in accordance with the “screened” appointment procedure provided in Rule
5.4 of the CPR Arbitration Rules.  The
non-party appointed arbitrator must have prior U.S. reinsurance experience as a
present or former officer or management employee of a reinsurance company, but
not of GNA or the Company or any of their respective affiliates.  The arbitration shall be conducted in New
York City.  Each party shall be
permitted to present its case, witnesses and evidence, if any, in the presence
of the other party. A written transcript of the proceedings shall be made and
furnished to the parties. The arbitrators shall determine the Dispute in
accordance with the law of Illinois, without giving effect to any conflict of
law rules or other rules that might render such law inapplicable or
unavailable, and shall apply this Agreement according to its terms, provided
that the provisions relating to arbitration shall be governed by the Federal
Arbitration Act, 9 U.S.C. §§ 1 et seq.

 

(c)           The
parties agree to be bound by any award or order resulting from any arbitration
conducted hereunder and further agree that judgment on any award or order
resulting from an arbitration conducted under this Section 5.04 may be entered
and enforced in any court having jurisdiction thereof.

 

5

 

(d)           Except
as expressly permitted by this Agreement, no party will commence or voluntarily
participate in any court action or proceeding concerning a Dispute, except (i)
for enforcement as contemplated by Section 5.04(c) above, (ii) to restrict or
vacate an arbitral decision based on the grounds specified under applicable
law, or (iii) for interim relief as provided in paragraph (e) below.  For purposes of the foregoing the parties
hereto submit to the non-exclusive jurisdiction of the courts of the State of
New York.

 

(e)           In
addition to the authority otherwise conferred on the arbitral tribunal, the
tribunal shall have the authority to make such orders for interim relief,
including injunctive relief, as it may deem just and equitable.  Notwithstanding paragraph (d) above, each
party acknowledges that in the event of any actual or threatened breach of
certain of the provisions of this Agreement, the remedy at law would not be
adequate, and therefore injunctive or other interim relief may be sought
immediately to restrain such breach.  If
the tribunal shall not have been appointed, either party may seek interim
relief from a court having jurisdiction if the award to which the applicant may
be entitled may be rendered ineffectual without such interim relief. Upon
appointment of the tribunal following any grant of interim relief by a court,
the tribunal may affirm or disaffirm such relief, and the parties will seek
modification or rescission of the court action as necessary to accord with the
tribunal’s decision.

 

(f)            Each
party will bear its own attorneys fees and costs incurred in connection with
the resolution of any Dispute in accordance with this Article V.

 

ARTICLE
VI

 

TERMINATION

 

SECTION 6.01.      Termination of the Agreement.

 

(a)           This
Agreement will terminate in its entirety on the earliest of:

 

(i)            the
date the Company’s liability under all of the Reinsurance Agreements is
terminated in accordance with the terms thereof;

 

(ii)           the
date that all of the Reinsurance Agreements are terminated in accordance with
the terms thereof; or

 

(iii)          the
date that this Agreement has been terminated with respect to all of the
Reinsured Businesses under Section 6.02(d).

 

(b)           This
Agreement is subject to immediate termination at the option of the Company,
upon written notice to GNA, on the occurrence of any of the following events:

 

(i)            A
voluntary or involuntary proceeding is commenced in any jurisdiction by or
against GNA or its Subsidiaries or Affiliates performing Services pursuant to
this Agreement for the purpose of conserving, rehabilitating or liquidating GNA
or such Subsidiaries or Affiliates, but only if the Services performed by the
subject of such proceeding are not assumed or performed by GNA or its
Subsidiaries or Affiliates that are not the subject of such proceeding; or

 

6

 

(ii)           GNA
or its Subsidiaries and Affiliates are unable to perform the services required
under this Agreement for a period of thirty (30) consecutive days for any
reason other than as a result of a Force Majeure.

 

(c)           This
Agreement may be terminated at any time upon the mutual written consent of the
parties hereto, which writing shall state the effective date of termination.

 

SECTION 6.02.      Termination with Respect to Any Reinsured Business.  The term of this Agreement will terminate
with respect to the portion of any Reinsured Business under any given
Reinsurance Agreement on the earliest of:

 

(a)           the
date the Company’s liability under such Reinsurance Agreements is terminated in
accordance with the terms thereof;

 

(b)           the
date that such Reinsurance Agreement is terminated in accordance with the terms
thereof;

 

(c)           the
date that the Company or its assignee becomes entitled to assume administration
of the portion of the Reinsured Business reinsured under such Reinsurance
Agreement;

 

(d)           seventy-five
(75) days following written notice by the Company of GNA’s willful, material
breach of its obligations under Articles II and IV of this Agreement with
respect to such Reinsured Business (provided that the Company shall not have
the right to terminate this Agreement (A) for so long as the GNA and its
Subsidiaries and Affiliates are making good faith effort to cure such breach,
not to exceed an additional one hundred eighty (180) days or (B) during the
pendency of any dispute resolution proceedings as set forth in Article V regarding
an alleged material breach); or

 

(e)           such
other date as agreed by the Company and GNA.

 

SECTION 6.03.      Effect of Termination. 
Upon termination of this Agreement in accordance with its terms, GNA
will have no further obligation to perform any Service, and the Company will
have no obligation to pay any Service Charges relating to any Service or make
any other payments under this Agreement (other than for Services performed
prior to such termination).  Upon termination
of this Agreement with respect to a Reinsured Business in accordance with this
Agreement’s terms, GNA will have no further obligation to perform, or cause its
Subsidiaries or Affiliates to perform any Service with respect to such
Reinsured Business, and the Company will have no obligation to pay any Service
Charges relating to any Service with respect to such Reinsured Business or make
any other payments under this Agreement with respect to such Reinsured Business
(other than for Services performed prior to such termination).

 

SECTION 6.04.      Survival. 
Article III (Costs and Disbursements) (but only in connection with
Service Charges incurred and accrued as of the date of termination of this
Agreement and the terms of Section 3.01(b) as applied to such Service Charges),
Section 4.03 (Limitation of Liability), Article V (Dispute Resolution),
Section 6.03 (Effect of Termination),

 

7

 

Section 6.04
(Survival), and Article VII (General Provisions) shall survive the
expiration or other termination of this Agreement and remain in full force and
effect.

 

SECTION 6.05.      Force Majeure. 
GNA (and any Person acting on its behalf including its Subsidiaries and
Affiliates) shall not have any liability or responsibility for failure to
fulfill any obligation under this Agreement so long as and to the extent to
which the fulfillment of such obligation is prevented, frustrated, hindered or
delayed as a consequence of circumstances of Force Majeure.  As soon as reasonably practicable after the
occurrence of any such event GNA shall: 
(a) notify the Company of the nature and extent of any such Force
Majeure condition and (b) use commercially reasonable efforts to remove any
such causes and resume performance under this Agreement as soon as feasible.

 

ARTICLE
VII

 

GENERAL PROVISIONS

 

SECTION 7.01.      Subcontractors. 
GNA and its Subsidiaries and Affiliates may hire or engage one or more
subcontractors to perform any or all of its obligations under this Agreement; provided
that if such subcontractors are used solely in connection with the Reinsured
Business, then the prior written consent of the Company to the use of any such
subcontractors shall be required, which consent will not be unreasonably
withheld; provided  further that GNA shall in all cases remain
liable for all its obligations under this Agreement, including, without
limitation, with respect to the scope of the Services, the Standard for
Services and the content of the Services performed in respect of the Reinsured
Businesses.  Under no circumstances
shall the Company be responsible for making any payments directly to any
subcontractor engaged by GNA or its Subsidiaries or Affiliates.

 

SECTION 7.02.      Additional Services; Books and Records.

 

(a)           If, during the term of this Agreement, either party
identifies any additional or other service that GNA or its Subsidiaries or
Affiliates are performing or that is necessary for GNA to start performing in
respect of the Reinsured Businesses, the parties hereto agree to negotiate in
good faith with respect to the Service Charge for such service (provided that
such services are of a type generally performed in respect of business like the
Reinsured Businesses) and the applicable service fees, payment procedures, and
other rights and obligations with respect thereto.  To the extent practicable, such additional or other services
shall be performed on terms substantially similar to those applicable to
Services of similar types and otherwise on terms consistent with those
contained in this Agreement.

 

(b)           All
books, records and data maintained by GNA and its Subsidiaries and Affiliates
with respect to the performance of a Service with respect to the Reinsured
Businesses shall be the exclusive property of GNA and its applicable
Subsidiaries and Affiliates.  The
Company, at its sole cost and expense, shall have the right to inspect, and
make copies of, any such books, records and data during regular business hours
upon reasonable advance notice to the Company.

 

8

 

SECTION 7.03.      Taxes.

 

(a)           Each
party shall be responsible for any personal property taxes on property it owns
or leases, for franchise and privilege taxes on its business, and for taxes
based on its net income or gross receipts.

 

(b)           The
Company may report and (as appropriate) pay any sales, use, excise,
value-added, services, consumption, and other taxes and duties (“Taxes”)
directly if the Company provides GNA with a direct pay or exemption
certificate.

 

(c)           The
parties agree to cooperate with each other to enable each to more accurately
determine its own tax liability and to minimize such liability to the extent
legally permissible.  GNA’s invoices
shall separately state the amount of any Taxes GNA is proposing to collect from
the Company.

 

(d)           GNA
shall promptly notify the Company of any claim for Taxes asserted by applicable
taxing authorities for which the Company is alleged to be financially
responsible hereunder.  GNA shall
coordinate with the Company the response to and settlement of, any such
claim.  Notwithstanding the above, the
Company’s liability for such Taxes is conditioned upon GNA providing the
Company notification within twenty (20) business days of receiving any proposed
assessment of any additional Taxes, interest or penalty due by GNA.

 

(e)           The
Company shall be entitled to receive and to retain any refund of Taxes paid to
GNA pursuant to this Agreement.  In the
event GNA shall be entitled to receive a refund of any Taxes paid by the
Company to GNA, GNA shall promptly pay, or cause the payment of, such refund to
the Company.

 

SECTION 7.04.      Confidential
Information.  GNA agrees to maintain
and safeguard, and cause its Subsidiaries and Affiliates to maintain and
safeguard, all GE Confidential Information pursuant to Section 6.2 of the
Master Agreement and the Company agrees to maintain and safeguard, and cause
its Subsidiaries and Affiliates to maintain and safeguard, all Genworth
Confidential Information pursuant to Section 6.2 of the Master Agreement and
each party hereto agrees that Section 6.2 of the Master Agreement is hereby
incorporated by reference into, and made a part of, this Agreement.  The parties hereto agree to comply with the
terms of the Business Associate Addendum attached as Schedule D.

 

SECTION 7.05.      Non-disclosure; Privilege; Conflicts of Interest.  Neither GNA, the Company nor any of their
respective Subsidiaries or Affiliates shall be required to disclose any of
their respective trade secret information or other information that provides
GNA and its Subsidiaries and Affiliates, or the Company and its Subsidiaries
and Affiliates, as applicable, a significant competitive advantage.  Further, neither GNA, the Company, nor any
of their respective Subsidiaries or Affiliates will be required to provide any
information in connection with this Agreement if the provision of such
information would serve as a waiver of any attorney-client privilege or other
applicable privilege afforded such information.  In no event will GNA or its Subsidiaries and Affiliates be required
to perform any Services if doing so would constitute a conflict of interest or
a breach of any applicable ethical rules governing the conduct of attorneys; provided
that GNA shall use its commercially reasonable efforts to resolve any such
conflict of interest or prevent any breach of any such ethical rules.

 

9

 

SECTION 7.06.      Headings and Schedules. 
Headings used herein are not a part of this Agreement and shall not
affect the terms hereof.  The attached
Schedules are a part of this Agreement.

 

SECTION 7.07.      Notices.  All
notices, requests, demands and other communications under this Agreement must
be in writing and will be deemed to have been duly given or made as
follows:  (a) if sent by registered or
certified mail in the United States return receipt requested, upon receipt; (b)
if sent by reputable overnight air courier, two business days after mailing;
(c) if sent by facsimile transmission, with a copy mailed on the same day in
the manner provided in (a) or (b) above, when transmitted and receipt is
confirmed by telephone; or (d) if otherwise actually personally delivered, when
delivered, and shall be delivered as follows:

 

If to GNA:

 

[                          ]

[                          ]

[                          ]

Facsimile:  [                          ]

Attention:  [                          ]

 

With a copy
to:

 

[                          ]

[                          ]

[                          ]

Facsimile:  [                          ]

Attention:  [                          ]

 

If to the
Company:

 

Union Fidelity
Life Insurance Company

200 North Martingale Road

Shaumburg, IL 60173-2096

Facsimile: (847) 330-3404

Attention: Chief Financial Officer

 

With a copy
to:

 

Union Fidelity
Life Insurance Company

200 North Martingale Road

Shaumburg, IL 60173-2096

Facsimile:  (847) 605-3044

Attention:  General Counsel

 

or to such other address or to such other Person as
either party may have last designated by notice to the other party.

 

10

 

SECTION 7.08.      Successors and Assigns. 
This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors, permitted assigns and legal
representatives.  Neither this
Agreement, nor any right or obligation hereunder, may be assigned by any party
without the prior written consent of the other party hereto.  Any assignment in violation of this Section
7.08 shall be void and shall have no force and effect.

 

SECTION 7.09.      Execution in Counterpart.  This Agreement may be executed by the parties hereto in any
number of counterparts, and by each of the parties hereto in separate
counterparts, each of which counterparts, when so executed and delivered, shall
be deemed to be an original, but all such counterparts shall together constitute
but one and the same instrument.

 

SECTION 7.10.      Currency. 
Whenever the word “Dollars” or the “$” sign appear in this Agreement,
they shall be construed to mean United States Dollars, and all transactions
under this Agreement shall be in United States Dollars.

 

SECTION 7.11.      Amendments.  This
Agreement may not be changed, altered or modified unless the same shall be in
writing executed by GNA and the Company.

 

SECTION 7.12.      Governing Law. 
This Agreement will be construed, performed and enforced in accordance
with the laws of the State of Illinois without giving effect to its principles
or rules of conflict of laws thereof to the extent such principles or rules
would require or permit the application of the laws of another jurisdiction.

 

SECTION 7.13.      Entire Agreement; Severability.  (a) 
This Agreement constitutes the entire agreement between the parties
hereto relating to the subject matter hereof and supersedes all prior and
contemporaneous agreements, understandings, statements, representations and
warranties, negotiations and discussions, whether oral or written, of the
parties and there are no general or specific warranties, representations or
other agreements by or among the parties in connection with the entering into
of this Agreement or the subject matter hereof except as specifically set forth
or contemplated herein.

 

(b)           If
any provision of this Agreement is held to be void or unenforceable, in whole
or in part, (i) such holding shall not affect the validity and
enforceability of the remainder of this Agreement, including any other
provision, paragraph or subparagraph, and (ii) the parties agree to
attempt in good faith to reform such void or unenforceable provision to the
extent necessary to render such provision enforceable and to carry out its
original intent.

 

SECTION 7.14.      No Waiver; Preservation of Remedies.  No consent or waiver, express or implied, by
any party to or of any breach or default by any other party in the performance
by such other party of its obligations hereunder shall be deemed or construed
to be a consent or waiver to or of any other breach or default in the
performance of obligations hereunder by such other party hereunder.  Failure on the part of any party to complain
of any act or failure to act of any other party or to declare any other party
in default, irrespective of how long such failure continues, shall not
constitute a waiver by such first party of any of its rights hereunder.  The rights and remedies provided are
cumulative and are not exclusive of any rights or remedies that any party may
otherwise have at law or equity.

 

11

 

SECTION 7.15.      Cooperation. 
Each party hereto shall cooperate fully with the other in all reasonable
respects in order to accomplish the objectives of this Agreement including
making available to each their respective officers and employees for interviews
and meetings with Governmental Authorities and furnishing any additional
assistance, information and documents as may be reasonably requested by a party
from time to time.

 

SECTION 7.16.      Third Party Beneficiary.  Nothing in this Agreement will confer any rights upon any Person
that is not a party or a successor or permitted assignee of a party to this
Agreement.

 

SECTION 7.17.      Negotiated Agreement. 
This Agreement has been negotiated by the parties and the fact that the
initial and final draft will have been prepared by either party or an
intermediary will not give rise to any presumption for or against any party to
this Agreement or be used in any respect or forum in the construction or
interpretation of this Agreement or any of its provisions.

 

SECTION 7.18.      Interpretation. 
Wherever the words “include,” “includes” or “including” are used in this
Agreement, they shall be deemed to be followed by the words “without
limitation.”  In addition,
interpretation of this Agreement shall be governed by the following rules of
construction:  (a) words in the singular
shall be held to include the plural and vice versa and words of one gender
shall be held to include the other gender as the context requires, (b)
references to the terms Article, Section, paragraph, and Schedule are
references to the Articles, Sections, paragraphs, and Schedules to this
Agreement unless otherwise specified, (c) provisions shall apply, when
appropriate, to successive events and transactions, and (d) this Agreement
shall be construed without regard to any presumption or rule requiring
construction or interpretation against the party drafting or causing any
instrument to be drafted.

 

SECTION 7.19.      No Right to Set-Off. 
The Company shall pay the full amount of costs and disbursements
incurred under this Agreement, and shall not set-off, counterclaim or otherwise
withhold any other amount owed to GNA on account of any obligation owed by GNA
to the Company.

 

[SIGNATURE PAGE FOLLOWS]

 

12

 

IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed on the date first written above by their respective duly authorized
officers.

 

	
   

  	
  GNA CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  UNION FIDELITY LIFE INSURANCE COMPANY

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

13

 

SCHEDULE A

 

SERVICES

 

The Services are broadly defined as activities performed by GNA and its
Subsidiaries and Affiliates that benefit the Reinsured Businesses.  The Services are more fully defined, without
limitation, below by functional area under the general headings “Business Overhead
Services” and “Corporate Overhead Services.”

 

Business Overhead Services

 

The services below will be provided by the “WIM” business unit of GNA
and its Subsidiaries and Affiliates with regards to the Structured Settlement
Annuity Reinsured Business and the Variable Annuity Reinsured Business:

 

Executive:

General support, counsel, strategy and leadership provided by WIM’s Chief
Executive Officer.

 

Human Resources:

General business level Human Resource related activities including but not
limited to leadership development, employee recruitment and staffing,
implementation of compensation policies and practices, payroll and benefit
administration, organizational communication, training, general security and
employee issue resolution and guidance.

 

Finance:

Cost of finance activities including but not limited to product financial
support and analysis, account reconciliations, state reporting, product
profitability analysis, investment income planning & analysis, expense
management, audit support, statutory & GAAP accounting, reporting &
analysis and ad hoc financial analysis.

 

Legal/Compliance:

Cost of support and coordination of litigation, government relations, human
resource, intellectual property, insurance regulatory, consumer privacy,
contract, compliance, and public relations matters.

 

Risk:

Cost of Risk Management and reinsurance support—Monitor production vs.
authority limits, monitor and review key risk measures.  General oversight of inforce product
performance analysis and reviews. 
Reinsurance oversight and treaty management including settlement with
reinsurers.

 

 

Facilities:

Campus expenses including building rent and maintenance, parking garage,
cafeteria, campus lawn care and utilities.

 

Information Technology:

General business technology infrastructure costs including but not limited to
general management, help desk assistance, data center management, disaster
recovery plans and digitization of processes.

 

Six Sigma Quality:

Costs including business project management and process improvement coaching,
execution and leadership.

 

Product Management:

Costs for product line managers to manage inforce policies and general product
line maintenance activities such as risk assessment, return on equity (“ROE”)  variance analysis and related ROE
improvement projects.

 

Operations:

Costs including management, project leadership and administrative support for
service operations supporting customers, policyholders and other stakeholders.

 

Other:

Costs including corporate insurance allocation to product lines (e.g.,
cost of building insurance and other property, plant and equipment).

 

Retention:

Costs including monitoring of inforce policy retention levels, design and
execute programs to retain inforce business.

 

Corporate Overhead Services

 

The services listed below will be provided by the “HQ” or corporate
functions at GNA with regard to each of the Reinsured Businesses:

 

Executive Office:

Costs including general support, counsel, strategy and leadership provided by
CEO, various HQ business insurance charges and allocations.

 

Human Resources:

Costs of general HR related activities such as leadership development, employee
recruitment and

 

2

 

staffing, compensation policies and practices, payroll and benefit
administration, organizational communication, that which is currently known as
the “GEFA University” learning center including online course development and
administration, physical security of the business locations and employee issue
resolution and guidance.

 

Actuarial Department and Capital Management:

Costs including rating agency coordination such as answering queries, making
presentations, and providing other required information for rating agencies;
state insurance department regulatory support, NAIC lobbying and investor
relations, including issues related to risk based capital; completion of
various actuarial and capital management functions such as: reserve
calculations, experience analysis, asset/liability management, cash flow
testing support, dividend forecasting, capital management, reinsurance and
capital markets support.

 

Finance:

HQ related finance costs, such as business level financial planning and
analysis, Statutory and GAAP accounting, reinsurance accounting, reporting and
analysis, annual statement (“blue book”) preparation and related disclosures
and schedules, statutory audit support, tax information needed to prepare
returns, treasury services, financial systems related support, maintenance and
infrastructure, technical accounting expertise.

 

Product Management:

Costs including general product management and product marketing compliance,
support pricing and retention initiatives.

 

Legal:

Costs including support and coordination of litigation, government relations,
human resource, intellectual property, insurance regulatory, consumer privacy,
contract, compliance, and public relations matters.

 

Risk:

Costs including business risk policies (currently known as “Policy 5.0/6.0”)
development and monitoring, treaty management, reinsurance and controllership
oversight.  These policies are developed
and implemented by the Risk team with others at Headquarters to manage assets
and liabilities, control business risks associated with investments,
controllership, systems infrastructure, process management, etc. Various
metrics are used to “trigger” leadership decision points in an effort to reduce
business risks.   Includes the
leadership of projects to reduce the business risks associated with various
systems and processes across the business.

 

Sourcing (Purchasing) and Facilities:

Costs including sourcing related services including Purchasing card (“P-card”)
Administration, Oracle sourcing/purchasing/receiving system (know as the “SSS
System”) Administration, requisition processing, competitive bidding/auction
services, spend data tracking/analysis, and

 

3

 

contract definition/negotiation. 
Leadership of certain expense reduction projects currently known as
“Bullet Trains” (which focus across the business on reducing individual expense
categories (PC leasing, postage, consulting, telecommunications, office
supplies, etc.) and other projects related to the increase in purchasing
efficiency and reduction of costs.

 

IT and e-Solutions:

General management costs associated with IT infrastructure, management of on
and off shore contractors, help desk, asset management (PC’s, printers,
servers, etc.), email service, Wide Area Networks (WAN), desktop support
(visiting actual users to assist them with IT needs), web hosting, Unix and NT
system administration, global computer operations, intellectual property,
contract and licenses of software, services and hardware, U.S.-based consulting
and control over remote infrastructure (for example, those systems currently
housed in Alpharetta, GA).

Costs of HQ security team, who provides disaster recovery, including
risk analysis & coordination of all IT associated with Disaster
Recovery.  In addition, security
includes coordination with all local business security officers, relating to
intrusion detection, anti-virus and other protections of systems.

Costs including project management, oversight and project manager
certification, using several industry standard processes including Six Sigma
“DMAIC” process improvement and other process improvement/development regimes.

Costs of developing and monitoring architectural plans for future operations
including technology related standards, guidelines and polices.

Costs of IT Vendor Management — includes negotiations and oversight for
vendor agreements on hardware, software and services.

Costs of IT Solutions — delivers IT solutions that meet business needs
through digitization of processes and deployment of web applications.

 

Operations Excellence:

Costs of Consolidation, Analysis, Management Strategy, and Leadership for Operations
and Shared Services.  Provide strategic
leadership and oversight to all operations departments, ensuring that best
practices are shared.

Costs of managing services used by all GEFA businesses, including Xerox
(current outsourced document processing provider), “1-800 Think GE” call center
(a point of contact for all GEFA products), and One Front Door (inbound imaging
strategy).

 

Changes in Services

 

The Business Overhead Services and Corporate Overhead Services shall
include such other comparable and/or successor Services implemented or
maintained from time to time by GNA and its Subsidiaries and Affiliates.

 

4

 

SCHEDULE B

 

REINSURED BUSINESSES

 

Structured Settlement Annuities

 

1.               Coinsurance Agreement, dated as of
    , 2004, by and between the Company and GE Life and
Annuity Assurance Company, a Virginia domiciled life insurance company

 

2.               Coinsurance Agreement, dated as of
    , 2004, by and between the Company and Federal Home
Life Insurance Company, a Virginia domiciled life insurance company

 

3.               Coinsurance Agreement, dated as of
    , 2004, by and between the Company and First Colony
Life Insurance Company, a Virginia domiciled life insurance company

 

4.               Coinsurance Agreement, dated as of
    , 2004, by and between the Company and General Electric
Capital Assurance Company, a Delaware domiciled life insurance company

 

5.               Coinsurance Agreement, dated as of
    , 2004, by and between the Company and GE Capital Life
Assurance Company of New York, a New York domiciled life insurance company

 

6.               Coinsurance Agreement, dated as of
    , 2004, by and between the Company and American
Mayflower Life Insurance Company of New York, a New York domiciled life
insurance company

 

Long Term Care

 

7.               Retrocession Agreement, dated as of
   , 2004, by and between the Company and General Electric
Capital Assurance Company, a Delaware domiciled life insurance company

 

8.               Retrocession Agreement, dated as of
   , 2004, by and between the Company and GE Capital Life Assurance
Company of New York, a New York domiciled life insurance company

 

Variable Annuities

 

9.               Reinsurance Agreement, dated as of
   , 2004, by and between the Company and GE Life and Annuity
Assurance Company, a Virginia domiciled life insurance company

 

10.         Reinsurance Agreement, dated as of
   , 2004, by and between the Company and GE Capital Life
Assurance Company of New York, a New York domiciled life insurance company

 

 

SCHEDULE C

 

SERVICE CHARGES

 

The “Annual
Expense Reimbursement Factors” used to calculate the Service Charges for each
respective line of business are as follows:

 

	
  Structured Settlement Annuity Reinsured Business:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Corporate
  Overhead Factor

  	
   

  	
  $** per
  Annum

  
	
   

  	
   

  	
   

  
	
  Business
  Overhead Factor

  	
   

  	
  $** per
  Policy

  
	
   

  	
   

  	
   

  
	
  Variable Annuity Reinsured Business

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Corporate
  Overhead Factor

  	
   

  	
  $** per
  Annum

  
	
   

  	
   

  	
   

  
	
  Business
  Overhead Factor

  	
   

  	
  $** per
  Policy

  
	
   

  	
   

  	
   

  
	
  Long-Term Care Retroceded Business

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Corporate
  Overhead Factor

  	
   

  	
  $** per
  Annum

  

 

The Service Charges will be determined quarterly and billed to the
Company in three equal installments at the end of the month during the
quarter.  Each monthly installment
billed for a particular line of business will be determined by (a) multiplying
the actual number of units at the beginning of the quarter covered by this
Agreement times the Business Overhead Factor (divided by twelve), if
applicable, and (b) adding the applicable Corporate Overhead Factor (divided by
twelve).

 

The Annual Expense Reimbursement Factors for each respective line of
business will be adjusted (i) for the year beginning January 1, 2005 and,
thereafter, every three (3) years during the term of this Agreement based on a
triennial cost/time study prepared in accordance with the methodology set forth
below (the “Triennial Study”) and (ii) for the years between the
Triennial Studies based on a report setting forth the Annual Expense
Reimbursement Factors prepared in accordance with the methodology set forth
below (the “Annual Expense Reimbursement Factors Report”).

 

(a) Triennial Study.  As soon
as practicable (and in any event within sixty (60) days) prior to January 1,
2005 and prior to the beginning of every third calendar year thereafter during
the term of this Agreement, GNA shall cause to be prepared and delivered to the
Company the Triennial Study which sets forth the Annual Expense Reimbursement
Factors for the next calendar year, together with all supporting data used in
preparing the Triennial Study and work papers, in reasonable detail, setting
forth the determination of such Annual Expense Reimbursement Factors based on
such Triennial Study (such documents, together with the Triennial Study, the “Triennial
Study Documents”).

 

 

(b) Annual Expense Reimbursement Factors Report.  As soon as practicable (and in any event
within thirty (30) days) prior to January 1, 2006 and prior to the beginning of
each calendar year thereafter in which no Triennial Study is prepared, GNA
shall cause to be prepared and delivered to the Company the Annual Expense
Reimbursement Factors Report, together with all supporting data used in
preparing the Annual Expense Reimbursement Factors Report and work papers, in
reasonable detail, setting forth the determination of such Annual Expense
Reimbursement Factors for the next calendar year (such documents, together with
the Annual Expense Reimbursement Factors Report, the “Annual Expense
Reimbursement Factors Documents”).

 

(c) Methodology.  At the
time of the Triennial Study, historical costs (to include costs for those
services identified as Business Overhead Services and Corporate Overhead
Services in Schedule A and any changes thereto pursuant to Schedule A)  will be determined for the Annual Expense
Reimbursement Factors identified above. 
For a given Business Overhead Factor (identified above in this Schedule C)
the identified or allocated costs, as applicable, will be divided by the total
number of remaining Reinsured Policies or Reinsured Contracts (as such terms
are defined in the applicable Reinsurance Agreement), as applicable, and the
Company’s current in-force business to derive an historical cost per unit.  The historical cost per unit will be used as
a prospective cost per unit for the next calendar year.  For the purposes of allocating costs of
providing Business Overhead Services, actual identified costs allocable to each
of the lines of business specified above (Structured Settlement Annuity
Reinsured Business and Variable Annuity Reinsured Business) shall be allocated
to such lines of business.  For the
purpose of allocating costs of providing the Corporate Overhead Services, the
historical costs of such services shall be allocated equally to each of the
lines of business specified above.

 

For the two
succeeding years in the period between the Triennial Studies the historical
dollar amounts by Annual Expense Reimbursement Factors will be adjusted (rolled
forward) for current year cost changes agreed to by GNA and the Company (in
accordance with the procedures set forth above).  The costs for Business Overhead Services will then be divided by
the total number of remaining Reinsured Policies or Reinsured Contracts (as
such terms are defined in the applicable Reinsurance Agreement) for the current
period to determine a prospective cost per unit for the next calendar
year.  The costs for Corporate Overhead Services
shall be allocated equally to each of the lines of business specified above.

 

An additional
adjustment, positive or negative, to the prospective cost per unit for Business
Overhead Services or per annum for Corporate Overhead Services determined by
either the Triennial Study or the two succeeding years may be negotiated
between the parties.  The additional
adjustment is for special projected costs or benefits of productivity, process
improvements, inflation, loss of scale, and any other cost variation which was
not included in the prior Triennial Study or the succeeding roll forward.

 

The combined
prospective unit cost, per annum cost and additional adjustment for a
respective line of business is the Annual Expense Reimbursement Factor for that
line of business.

 

(d) Review of Documents.  Following the delivery of the Annual Expense
Reimbursement Factors Documents or the Triennial Study Documents, as
applicable, GNA shall (i) provide to

 

2

 

the Company or its designated representative copies of
such additional work papers and other documents relating to its preparation of
the Annual Expense Reimbursement Factors Report or Triennial Study, as
applicable, as the Company or its designated representative may reasonably
request, including, without limitation, claims files and practices and (ii)
cooperate with, and make its personnel and facilities reasonably available to,
the Company and the Company’s designated representative for the purpose of
providing such other information as the Company or the Company’s designated
representative may reasonably request concerning Annual Expense Reimbursement
Factor Documents or the Triennial Study Documents, as applicable, and the
calculation of the Annual Expense Reimbursement Factors.

 

(e) Notice of Disagreement.  In the event that the Company has any
disagreement with any of the Annual Expense Reimbursement Factor Documents or
the Triennial Study Documents, as applicable, the Company shall give written
notice of all such disagreements (a “Notice of Disagreement”) to GNA
within thirty (30) days after the Annual Expense Reimbursement Factors
Documents or the Triennial Study Documents, as applicable, are delivered to the
Company.  Any Notice of Disagreement
shall set forth each item in disagreement and shall provide reasonable
specificity as to the basis for each disagreement and shall specify the total
adjustment to the Annual Expense Reimbursement Factors as proposed by GNA as a
result of such items in disagreement.

 

(f) Dispute Resolution.  If the Company does not deliver a Notice of
Disagreement to the Company within such thirty (30) day period, the Annual
Expense Reimbursement Factors Documents and the Triennial Study Documents, as
applicable, shall be final and binding upon the parties hereto and shall
constitute the final calculation of the Annual Expense Reimbursement Factors
for the next calendar year.  If the
Company delivers a Notice of Disagreement to GNA within such thirty (30) day
period, the parties shall (and shall cause their respective designated
representatives to) negotiate in good faith to resolve all disagreements as
promptly as practicable.  Any changes in
the Annual Expense Reimbursement Factors, if any, that are agreed to by the
Company and GNA within sixty (60) days of the aforementioned delivery of the
Annual Expense Reimbursement Factors Documents or the Triennial Study
Documents, as applicable, shall be incorporated into a final calculation of the
Annual Expense Reimbursement Factors. 
If the parties and their respective designated representatives are
unable to resolve all disagreements within sixty (60) days of delivery of the
Annual Expense Reimbursement Factors Documents or the Triennial Study
Documents, as applicable, then all unresolved disagreements will be submitted
within ten (10) days after the end of such sixty (60) day period for resolution
in accordance herewith to an independent certified public accounting firm of
national standing and reputation (the “Accounting Firm”) mutually
acceptable to the Company and GNA.  The
parties shall cooperate in good faith with the Accounting Firm and shall give
the Accounting Firm access to all data and other information requested by the
Accounting Firm for purposes of such resolution.  The Accounting Firm shall, within thirty (30) days after its
engagement, deliver to the Company and GNA a definitive calculation of the
Business Overhead Factors, which shall be final and binding upon the parties
hereto and shall be so reflected in the calculation of the Business Overhead
Factors.  The Company and GNA shall each
pay one-half of the fees and expenses of the Accounting Firm.

 

(g) Service Charges Pending Resolution.  In the event of a dispute with respect to
any Annual Expense Reimbursement Factors for the next succeeding Calendar year,
the Company and GNA

 

3

 

agree that the Annual Expense Reimbursement Factors then in effect
under this Agreement shall remain in effect pending resolution of such dispute
and adjustment, if any, in accordance with the dispute resolution procedure set
forth in paragraph (f) above.

 

4

 

SCHEDULE D

 

BUSINESS ASSOCIATE ADDENDUM

 

I               Purpose.

 

In order to disclose certain information to GNA (for
purposes of this Addendum, the “Provider”) under this Addendum, some of which
may constitute Protected Health Information (“PHI”) (defined below), the
Company (for purposes of this Addendum, the “Recipient”) and Provider mutually
agree to comply (and Provider shall cause its Subsidiaries and Affiliates
performing Services to comply) with the terms of this Addendum for the purpose
of satisfying the requirements of the Health Insurance Portability and
Accountability Act of 1996 (“HIPAA”) and its implementing privacy regulations
at 45 C.F.R. Parts 160-164 (“HIPAA Privacy Rule”).   These provisions shall apply to Provider and its Subsidiaries
and Affiliates to the extent that any or Provider or its Subsidiaries and Affiliates
is considered a “Business Associate” under the HIPAA Privacy Rule and all
references in this section to Business Associates shall refer to Provider or
such Subsidiary or Affiliate. 
Capitalized terms not otherwise defined herein shall have the meaning
assigned in the Agreement.  Notwithstanding
anything else to the contrary in the Agreement, in the event of a conflict
between this Addendum and the Agreement, the terms of this Addendum shall
prevail.

 

II             Permitted Uses and Disclosures.

 

Business Associate agrees to use or disclose Protected
Health Information (“PHI”) that it creates for or receives from Recipient or
its Subsidiaries only as follows.  The
capitalized term “Protected Health Information or PHI” has the meaning set
forth in 45 Code of Federal Regulations Section 164.501, as amended from time
to time.  Generally, this term means
individually identifiable health information including, without limitation, all
information, data and materials, including without limitation, demographic,
medical and financial information, that relates to the past, present, or future
physical or mental health or condition of an individual; the provision of
health care to an individual; or the past present, or future payment for the
provision of health care to an individual; and that identifies the individual
or with respect to which there is a reasonable basis to believe the information
can be used to identify the individual. 
This definition shall include any demographic information concerning
members and participants in, and applicants for, Recipient’s or its
Subsidiaries’ health benefit plans.  All
other terms used in this Addendum shall have the meanings set forth in the
applicable definitions under the HIPAA Privacy Rule.

 

A.    Functions and Activities on Company’s Behalf.  Business Associate is permitted to use and
disclose PHI it creates for or receives from Recipient or its Subsidiaries only
for the purposes described in this Addendum or the Agreement that are not
inconsistent with the provisions of this Addendum, or as required by law, or
following receipt of prior written approval from whichever of the Recipient or
its Subsidiary or Affiliate for which the relevant PHI was created or from
which the relevant PHI was received.  In
addition to these specific requirements below, Business Associate may use or
disclose PHI only in a manner that would not violate the HIPAA Privacy Rule if
done by the Recipient or its Subsidiaries.

 

 

B.    Business
Associate’s Operations.  Business
Associate is permitted by this Agreement to use PHI it creates for or receives
from Recipient or its Subsidiaries: (i) if such use is reasonably necessary for
Business Associate’s proper management and administration; and (ii) as
reasonably necessary to carry out Business Associate’s legal responsibilities.
Business Associate is permitted to disclose PHI it creates for or receives from
Recipient or its Subsidiaries for the purposes identified in this Section only
if the following conditions are met:

 

(1)  The disclosure is required
by law; or

 

(2) The disclosure is reasonably necessary to Business
Associate’s proper management and administration, and Business Associate
obtains reasonable assurances in writing from any person or organization to
which Business Associate will disclose such PHI that the person or organization
will:

 

a. Hold such PHI as confidential and use or further
disclose it only for the purpose for which Business Associate disclosed it to
the person or organization or as required by law; and

 

b. Notify Business Associate (who will in turn
promptly notify whichever of the Recipient or its Subsidiary or Affiliate for
which the relevant PHI was created or from which the relevant PHI was received)
of any instance of which the person or organization becomes aware in which the
confidentiality of such PHI was breached.

 

C.    Minimum
Necessary Standard.  In performing
the functions and activities on Recipient’s or its Subsidiaries’ behalf
pursuant to the Agreement, Business Associate agrees to use, disclose or
request only the minimum necessary PHI to accomplish the purpose of the use,
disclosure or request.  Business
Associate must have in place policies and procedures that limit the PHI
disclosed to meet this minimum necessary standard.

 

D.    Prohibition on Unauthorized Use or Disclosure. 
Business Associate will neither use nor disclose PHI it creates or
receives for or from Recipient, its Subsidiaries, or from another business
associate of Recipient or its Subsidiaries, except as permitted or required by
this Addendum or the Agreement that are not inconsistent with the provisions of
this Addendum, or as required by law, or following receipt of prior written
approval from whichever of the Recipient or its Subsidiary or Affiliate for
which the relevant PHI was created or from which the relevant PHI was received.

 

E.     De-identification of Information.  Business Associate agrees neither to de-identify PHI it creates
for or receives from Recipient or its Subsidiaries or from another business
associate of Recipient or its Subsidiaries, nor use or disclose such de-identified
PHI, unless such de-identification is expressly permitted under the terms and
conditions of this Addendum or the Agreement and related to Recipient’s or its
Subsidiaries’ activities for purposes of “treatment”, “payment” or “health care
operations”, as those terms are defined under the HIPAA Privacy Rule.  De-identification of PHI, other than as
expressly permitted under the terms and conditions of the Addendum for Business
Associate to perform services for Recipient or its Subsidiaries, is not a
permitted use of PHI under this Addendum.

 

2

 

Business Associate further agrees that it will not
create a “Limited Data Set” as defined by the HIPAA Privacy Rule using PHI it
creates or receives, or receives from another business associate of Recipient
or its Subsidiaries, nor use or disclose such Limited Data Set unless: (i) such
creation, use or disclosure is expressly permitted under the terms and
conditions of this Addendum or the Agreement that are not inconsistent with the
provisions of this Addendum; and such creation, use or disclosure is for
services provided by Business Associate that relate to Recipient’s or its
Subsidiaries’ activities for purposes of “treatment”, “payment” or “health care
operations”, as those terms are defined under the HIPAA Privacy Rule.

 

F.     Information Safeguards.  Business
Associate will develop, document, implement, maintain and use appropriate
administrative, technical and physical safeguards to preserve the integrity and
confidentiality of and to prevent non-permitted use or disclosure of PHI
created for or received from Recipient or its Subsidiaries.  These safeguards must be appropriate to the
size and complexity of Business Associate’s operations and the nature and scope
of its activities.  Business Associate
agrees that these safeguards will meet any applicable requirements set forth by
the U.S. Department of Health and Human Services, including (as of the
effective date or as of the compliance date, whichever is applicable) any
requirements set forth in the final HIPAA security regulations.  Business Associate agrees to mitigate, to
the extent practicable, any harmful effect that is known to Business Associate
resulting from a use or disclosure of PHI by Business Associate in violation of
the requirements of this Addendum.

 

III            Conducting Standard Transactions.  In the course of performing services for
Recipient or its Subsidiaries, to the extent that Business Associate will
conduct Standard Transactions for or on behalf of Recipient or its Subsidiaries,
Business Associate will comply, and will require any subcontractor or agent
involved with the conduct of such Standard Transactions to comply, with each
applicable requirement of 45 C.F.R. Part 162. 
“Standard Transaction(s)” shall mean a transaction that complies with
the standards set forth at 45 C.F.R. parts 160 and 162.  Further, Business Associate will not enter
into, or permit its subcontractors or agents to enter into, any trading partner
agreement in connection with the conduct of Standard Transactions for or on
behalf of the Recipient or its Subsidiaries that:

 

a.               Changes
the definition, data condition, or use of a data element or segment in a
Standard Transaction;

 

b.              Adds
any data element or segment to the maximum defined data set;

 

c.               Uses
any code or data element that is marked “not used” in the Standard
Transaction’s implementation specification or is not in the Standard
Transaction’s implementation specification; or

 

d.              Changes
the meaning or intent of the Standard Transaction’s implementation
specification.

 

IV            Sub-Contractors, Agents or Other Representatives.   Business Associate will require any of its subcontractors, agents
or other representatives to which Business Associate is permitted by this
Addendum or the Agreement (or is otherwise given Recipient’s or the relevant
Subsidiary’s or Affiliate’s prior written approval) to disclose any of the PHI
Business Associate creates or

 

3

 

receives
for or from Recipient or its Subsidiaries, to provide reasonable assurances in
writing that subcontractor or agent will comply with the same restrictions and
conditions that apply to the Business Associate under the terms and conditions
of this Addendum with respect to such PHI.

 

V             Protected Health Information
Access, Amendment and Disclosure Accounting.

 

G.    Access.  Business Associate
will promptly upon Recipient’s or its Subsidiary’s or Affiliate’s request make
available to Recipient, its Subsidiary, its Affiliate, or, at Recipient’s or
such Subsidiary’s or Affiliate’s direction, to the individual (or the
individual’s personal representative) for inspection and obtaining copies any
PHI about the individual which Business Associate created for or received from
Recipient or its Subsidiary or Affiliate and that is in Business Associate’s
custody or control, so that Recipient or its Subsidiary or Affiliate may meet
its access obligations under 45 Code of Federal Regulations § 164.524.

 

H.    Amendment.  Upon Recipient’s or its
Subsidiary’s or Affiliate’s request Business Associate will promptly amend or
permit Recipient or its Subsidiary or Affiliate access to amend any portion of
the PHI which Business Associate created for or received from Recipient or its
Subsidiary or Affiliate, and incorporate any amendments to such PHI, so that
Recipient or its Subsidiary or Affiliate may meet its amendment obligations
under 45 Code of Federal Regulations § 164.526.

 

I.      Disclosure Accounting.  So that Recipient or its Subsidiaries or Affiliates may meet their
disclosure accounting obligations under 45 Code of Federal Regulations §
164.528:

 

1.     Disclosure
Tracking.  Business Associate will
record for each disclosure, not excepted from disclosure accounting under
Section V.C.2 below, that Business Associate makes to Recipient or its
Subsidiaries of PHI that Business Associate creates for or receives from
Recipient or its Subsidiaries, (i) the disclosure date, (ii) the name and
member or other policy identification number of the person about whom the
disclosure is made, (iii) the name and (if known) address of the person or
entity to whom Business Associate made the disclosure, (iv) a brief description
of the PHI disclosed, and (v) a brief statement of the purpose of the
disclosure (items i-v, collectively, the “disclosure information”).  For repetitive disclosures Business
Associate makes to the same person or entity (including Recipient or its
Subsidiaries) for a single purpose, Business Associate may provide a) the
disclosure information for the first of these repetitive disclosures, (b) the
frequency, periodicity or number of these repetitive disclosures and (c) the
date of the last of these repetitive disclosures.  Business Associate will make this disclosure information
available to Recipient or its Subsidiaries promptly upon Recipient’s or its
Subsidiaries’ request.

 

2.     Exceptions
from Disclosure Tracking.  Business
Associate need not record disclosure information or otherwise account for
disclosures of PHI that this Addendum or Recipient or the relevant Subsidiary
or Affiliate in writing permits or requires (i) for the purpose of Recipient’s
or its Subsidiaries’ treatment activities, payment activities, or health care
operations, (ii) to the individual who is the subject of the PHI disclosed or
to that individual’s personal representative; (iii) to persons involved in that
individual’s

 

4

 

health care or payment for health care; (iv) for
notification for disaster relief purposes, (v) for national security or
intelligence purposes, (vi) to law enforcement officials or correctional
institutions regarding inmates; or   (vii) pursuant to an
authorization; (viii) for disclosures of certain PHI made as part of a Limited
Data Set; (ix) for certain incidental disclosures that may occur where
reasonable safeguards have been implemented; and (x) for disclosures prior to
April 14, 2003.

 

3.     Disclosure
Tracking Time Periods.  Business
Associate must have available for Recipient and its Subsidiaries the disclosure
information required by this section for the 6 years preceding Recipient’s or
its Subsidiaries’ request for the disclosure information (except Business
Associate need have no disclosure information for disclosures occurring before
April 14, 2003).

 

VI            Additional Business Associate
Provisions

 

J.     Reporting
of Breach of Privacy Obligations. 
Business Associate will provide written notice to whichever of the
Recipient or its Subsidiary or Affiliate for which the relevant PHI was created
or from which the relevant PHI was received of any use or disclosure of PHI
that is neither permitted by this Addendum nor given prior written approval by
Recipient or the relevant Subsidiary or Affiliate promptly after Business
Associate learns of such non-permitted use or disclosure.  Business Associate’s report will at least:

 

(i)            Identify
the nature of the non-permitted use or disclosure;

 

(ii)           Identify
the PHI used or disclosed;

 

(iii)          Identify
who made the non-permitted use or received the non-permitted disclosure;

 

(iv)          Identify
what corrective action Business Associate took or will take to prevent further
non-permitted uses or disclosures;

 

(v)           Identify
what Business Associate did or will do to mitigate any deleterious effect of
the non-permitted use or disclosure; and

 

(vi)          Provide such other information, including a written
report, as Recipient or the relevant Subsidiary or Affiliate may reasonably
request.

 

K.    Amendment.  Upon the effective date
of any final regulation or amendment to final regulations promulgated by the
U.S. Department of Health and Human Services with respect to PHI, including,
but not limited to the HIPAA privacy and security regulations, this Addendum
and the Agreement will automatically be amended so that the obligations they
impose on Business Associate remain in compliance with these regulations.

 

In addition, to the extent that new state or federal
law requires changes to Business Associate’s obligations under this Addendum,
this Addendum shall automatically be amended to include such additional
obligations, upon notice by Recipient or its Subsidiaries to Business Associate
of such obligations.  Business
Associate’s continued performance of services under the Agreement shall be
deemed acceptance of these additional obligations.

 

5

 

L.     Audit and Review of Policies and Procedures.  Business
Associate agrees to provide, upon Recipient request, access to and copies of
any policies and procedures developed or utilized by Business Associate
regarding the protection of PHI.  Business
Associate agrees to provide, upon Recipient’s request, access to Business
Associate’s internal practices, books, and records, as they relate to Business
Associate’s services, duties and obligations set forth in this Addendum and the
Agreement(s) under which Business Associate provides services and / or products
to or on behalf of Recipient or its Subsidiaries, for purposes of Recipient’s
or its Subsidiaries’ review of such internal practices, books, and records.

 

6

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