HomeMy Public PortalAbout12-8398 North American Risk Services Inc Sponsored by: City Manager
Resolution No. 12-8398
A RESOLUTION OF THE CITY COMMISSION OF THE CITY OF
OPA-LOCKA,FLORIDA,TO AUTHORIZE THE CITY MANAGER
TO ENTER INTO A CONTRACT WITH NORTH AMERICAN RISK
SERVICES, INC (NARS) FOR A ONE YEAR PERIOD TO
REPRESENT THE CITY AS THE SERVICING AGENT/TPA FOR
THE CITY WORKERS' COMPENSATION CASES WHERE THE
CITY IS SELF INSURED, IN AN AMOUNT NOT TO EXCEED
$10,000,PAYABLE FROM ACCOUNT 19-519240;PROVIDING FOR
INCORPORATION OF RECITALS; PROVIDING FOR AN
EFFECTIVE DATE
WHEREAS,North American Risk, Inc. took over Unisource Administrators, Inc., and
WHEREAS,the City is no longer under contract with Unisource; and
WHEREAS,the City does not have a servicing agent/TPA to handle outstanding workers'
comp claims; and
WHEREAS,the City Commission desires to enter into contract with North American Risk,
Inc to handle workers' compensation claims; and
NOW,THEREFORE,BE IT DULY RESOLVED BY THE CITY COMMISSION OF
THE CITY OF OPA-LOCKA, FLORIDA:
Section 1. The recitals to the preamble herein are incorporated by reference.
Section 2. The City Commission of the City of Opa-locka hereby authorizes the City
Manager to enter into a contract with North American Risk Services, Inc(NARS) for a one year
period to represent the City as the servicing agent/TPA for the City workers' compensation cases,
in an amount not to exceed $10,000,payable from Account Number 19-519240.
Section 3. This resolution shall take effect immediately upon adoption.
Resolution No. 12-8398
PASSED AND ADOPTED this 25th day of April, 2012.
1 YRA AYLOR
MAYOR
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canna Flores
terim City Clerk
Approved as o form and legal sufficiency:
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Moved by: COMMISSIONER `1 LMES
Seconded by: COMMISSIONER ILLER
Commission Vote: YES
Commissioner Holmes: YES
Commissioner Miller: YES
Commissioner Tydus: YES
Vice-Mayor Johnson: YES
Mayor Taylor: YES
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City of Opa-Locka
Agenda Cover Memo
Commission Meeting April 25,2012 Item Type: Resolution Ordinance Other
Date: X
(EnterX in box)
Fiscal Impact: Ordinance Reading: 1st Reading 2nd Reading
(EnterX in box) Yes No (EnterX in box)
Public Hearing: Yes No Yes No
X (Enter X in box) X X
Funding Source: (Enter Fund&Dept) Advertising Requirement: Yes No
(Enter Acct No.) (Enter X in box)
General X
19-519240 Government
Contract/P.O.Required: Yes No RFP/RFQ/Bid#:
(EnterX in box) X N/A
Strategic Plan Related Yes No Strategic Plan Priority Area: Strategic Plan Obj./Strategy: (list the
(Enter X in box) specific objective/strategy this item will address)
Enhance Organizational 0
Bus.&Economic Dev 0
X Public Safety 0
Quality of Education CI
Qual.of Life&City Image 0
Communcation 0
Sponsor Name CITY MANAGER Department: HUMAN RESOURCES
Short Title:
RESOLUTION OF THE CITY COMMISSION OF THE CITY OF OPA-LOCKA, FL AUTHORIZING THE CITY
MANAGER TO ACCEPT AND ENTER INTO A CONTRACT WITH THE NORTH AMERICAN RISK SERVICES, INC.
(NARS)TO REPRESENT THE CITY AS THE SERVICING AGENT/TPA FOR THE CITY ON WORKERS
COMPENSATION CASES WHERE THE CITY IS SELF INSURED PAYABLE FROM ACCOUNT 19-519240.
Staff Summary:
Staff recommends the accepting the proposed contract to handle outstanding workers compensation
due to their takeover of the former company Unisource Administartors, Inc. whose contract with the
City terminated prior to the takeover by NARS.
Proposed Action:
Staff recommends approval.
Attachment:
1) Agenda Item Request
2) Contract from North American Risk Services, Inc. (NARS)
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Memorandum
TO: Mayor Myra L.Taylor
Vice-Mayor Dorothy Johnson
Commissioner Timothy Holmes
Commissioner Gail E. Miller
Commissioner Rose Tydus
�Y
FROM: Bryan K. Finn't..1:.• Manager
DATE: Apri
SUBJ: Approval to enter into a contract for a Servicing Agent/TPA to handle pending
Worker's Compensation Cases
Request: RESOLUTION OF THE CITY COMMISSION OF THE CITY OF OPA-LOCKA, FL
AUTHORIZING THE CITY A MANGER TO ACCEPT AND ENTER INTO A CONTRACT WITH NORTH
AMERICAN RISK SERVICES, INC. (NARS) IN THE AMOUNT OF $20,000 FOR A TWO YEAR
PERIOD TO REPRESENT THE CITY AS THE SERVICING AGENT/TPA FOR THE CITY ON WORKERS
COMPENSATION CASES WHERE THE CITY IS SELF INSURED PAYABLE FROM ACCOUNT 19-
519240.
Description: Staff recommends accepting the proposed contract to handle outstanding
Workers compensation due to their takeover of the former company, Unisource
Administrators, Inc. whose contract with the City terminated prior to the takeover by NARS.
Financial Impact: The City does not have a servicing agent/TPA to handle outstanding workers
compensation claims and protect its interest which could result in high settlement charges or
lost cases. The contract cost of $20,000 spread over a two year period could minimize the
City's losses for settlements or lost cases.
Account Number: General Government— 19-519240
Implementation Timeline: Upon execution of the Contract.
Legislative History: None
Recommendation(s): Staff recommends approval.
Attachments: Proposal from North American Risk Services, Inc. (NARS)
PREPARED BY: Shirley Freeman, Human Resources Director
CLAIMS SERVICES AGREEMENT
THIS CLAIMS SERVICES AGREEMENT("Agreement") is by and between The City
of Opa-Locka, Florida ("Company"), and North American Risk Services, Inc. a Delaware
company with principal offices at 240 East Central Parkway, Altamonte Springs, Florida 32701
("Service Company"), each referred to herein individually as "Party" and collectively as
"Parties".
WITNESSETH
In consideration of the covenants and agreements contained herein, the Parties hereto agree as
follows:
RECITALS
This Agreement is made and entered into with respect to the following facts:
A. Service Company is in the business of providing claims adjusting and administrative
services for property and casualty coverages and exposures on behalf of insurance
companies.
B. Company desires to purchase the services of Service Company and Service Company
desires to provide such services to the Company in connection with the insurance programs
listed on the attached Exhibit C (the "Programs") under which the Company is the primary
insurance carrier for liability and property coverage.
ARTICLE 1
EFFECTIVE DATE/TERM
1.1 This Agreement shall be effective as of April 10, 2012 ("Commencement Date"), and
shall continue in full force until termination in accordance with the provisions of this
Agreement.
1.2 The Term of this Agreement shall commence as of the Commencement Date and shall
continue in force for twenty four consecutive months expiring twenty four months from
the Commencement Date. Upon its expiration this Agreement will automatically renew
from year to year (each subsequent year a "Renewal Term") subject to Article 11 of this
Agreement and Compensation as set out in Exhibit B.
ARTICLE 2
CLAIMS ADJUSTING AUTHORITY AND RESPONSIBILITIES OF SERVICE
COMPANY
2.1 Subject to all the terms and conditions of this Agreement regarding termination or
otherwise, Service Company shall have the authority and responsibility to provide claims
adjusting and administration services to conclusion of each claim file or incident assigned
to it by the Company in connection with claims or losses relating to occurrences under
policies of insurance issued pursuant to the Programs. Such claims adjusting and
administration services shall be subject to oversight by Company or its designee.
2.2 In connection with its authority and responsibilities under this Agreement, Service
Company shall provide its services subject to the following guidelines:
a) Company will assign the claims (such term defined as claims made in connection with
the Programs, which involve actual, alleged or suspected loss) to be handled by Service
Company and may decide to reassign these claims to other resources at its sole discretion.
Upon receipt of assignment, Service Company will initiate procedures for the proper and
immediate servicing of each claim.
b) Service Company will investigate and adjust, settle or deny all claims in accordance with
applicable state and insurance laws, subject to the ultimate authority of the Company as
provided in Article 3 hereof.
c) Upon approval of the Company, or within the authority expressly granted to Service
Company, engage the services of persons or firms outside its organization for work in
connection with investigations and adjustment of claims and to incur other "Allocated
Loss Adjustment Expense" (as defined in Article 4, paragraph 4.3) at the Company's
expense. Both the selection and compensation of attorneys and vendors shall be
approved by the Company and the Service Company, and either shall have the right to
terminate the employment of any attorney or vendor considered unsatisfactory.
d) Service Company shall establish and adequately reserve each claim file for each claim
exposure and enter such claim and file documentation in accordance with Company's
statistical data and system requirements.
e) Claim Bank Account
i. In order to allow for timely payment of claims and claims related expenses in
accordance with applicable law or insurance regulations, Company shall establish,
fund, and maintain all such funds in a bank account ("Claim Bank Account")
which the Service Company may draw against as provided in this Agreement.
The Service Company shall act at all times within its fiduciary capacity as
required by law, and shall not commingle any such funds with any other funds
including, but not limited to, funds from other insurance companies and the
Service Company's general operating funds. The Company shall fund the
ClaimBank Account with amounts necessary to pay all claims and Allocated Loss
Adjustment Expenses, and shall be responsible for all costs and fees associated
with maintaining the Claim Bank Account.
ii. Settlement payments shall be made on Company checks. The funds disbursed
through the Claim Bank Account shall be funded by the Company or by a
premium trust account established by the Company. All interest accrued in the
Claim Bank Account shall belong to the Company. All checks issued by the
Service Company on the Claim Bank Account shall be signed by two signatories
of Service Company when in excess of Two Thousand Five Hundred Dollars
($2,500). All other checks must be signed by one signatory of Service Company.
The required signatures on checks for amounts less than ten thousand dollars
($10,000) may be electronic signatures of the approved signatories, provided that
the Company reserves the right to revoke this electronic signature authorization at
any time, upon 30 days' notice, in Company's sole discretion. All checks written
on the Claim Bank Account, which have not been cashed within 180 days from
the date issued, shall be voided, investigated, and reissued if necessary. All such
voided drafts must be accounted for in the reconciliation. In addition, thereto, the
Service Company must account to the Company for the inventory of all Claim
Bank Account checks under its control on a monthly basis. The Service Company
will comply with all state escheat Laws including the reporting of escheat to all
states requiring such reports.
f) Recoveries. The Service Company shall deposit all recovery amounts, net of fees
charged for recovery by Service Company, including, without limitation, subrogation,
salvage, and adjusting reimbursements relating to claims and Allocated Loss Adjustment
Expensespreviously paid from the Claim Bank Account, directly to the Claim Bank
Account.
g) Service Company shall maintain an accurate and complete claim file on each reported
claim, which shall be available during normal business hours for inspection by the
Company, its representatives or by appropriate regulatory authorities. The claim files and
all related documentation are the property of the Company, though Service Company
may retain copies it deems necessary pursuant to legal, tax and accounting requirements.
In addition, Service Company shall retain the right to continuing access to books and
records necessary to permit the Service Company to fulfill all of its contractual
obligations to the Company. Service Company shall maintain and store closed claim files
for no less than one year after the expiration of the statute of limitations applicable to
each claim file.
h) Service Company shall assist as necessary in the preparation of all claims related forms
necessary for the efficient operation of the Programs including the preparation and timely
filing of all legally required forms and reports with the appropriate state and federal
agencies, relating to its claims adjusting and administration services including but not
limited to filings required by Section 6041 of the Internal Revenue Code and, to the
extent specifically so designated on Exhibit A ("MMSEA Designated Programs"),
providing Medicare, Medicaid and SCHIP Extension Act of 2007 (MMSEA) Mandatory
Insurance Reporting Services for those MMSEA Designated Programs, as set forth in
Article 2.3, herein. However, Service Company's obligations as set forth in this Article
2.2(h) shall be limited to assisting in the preparation and filing of those forms and filings
that are required as of the effective date of this Agreement.
i) Service Company, in connection with the performance of its obligations under this
Agreement, will provide trained, competent, and where required, licensed claims
adjusters and perform the services to be rendered hereunder in a manner commensurate
with professional standards, in good faith, and in accordance with all applicable laws and
regulations.
j) Service Company shall protect any subrogation rights of the Company, which may arise
upon payment of claims and notify the Company of any subrogation rights, which may be
available to the Company. At the direction of the Company, Service Company shall
pursue the Company's subrogation rights through litigation or otherwise.
k) Service Company shall perform all administrative and clerical work in connection with
Company's claims.
1) Service Company shall immediately forward to the Company any civil lawsuit or any
other inquiry, written complaint or request received from an insurance department, other
regulatory agency, client, claimant, agent, broker, or other interested party relating to
claim services under this Agreement. The Company will respond and Service Company
will fully cooperate and assist Company in responding to these inquiries. Service
Company shall establish a tracking system for complaints or inquiries received from a
state department of insurance, or other similar state or federal entity. For purposes of this
subsection, "complaint" shall mean any written communication primarily expressing a
grievance.
Service Company shall immediately report all cases involving suspected fraud to
Company. Settlement authority is not permitted on cases of suspected fraud unless
Service Company receives written authority from Company.
2.3 In accordance with Section 2.2(g), above, Service Company shall, only on those MMSEA
Designated Programs, provide Medicare, Medicaid and SCHIP Extension Act of 2007
(MMSEA) Mandatory Insurance Reporting Services to Company relating to the
Programs as follows:
a) The following terms shall have the following definitions:
i. "Claimant" means a person who is covered by any insurance Program of
Company and/or insurance Program administered by Service Company.
ii. "Claim Settlement Allocation" ("CSA") means a report providing an estimate of
future Medicare covered expenses with less detail than that of an MSA and is
recommended in settlements of small claims which areless than $2,500 in the
aggregate and which do not meet the workload review thresholds established by
the Centers for Medicare &Medicaid Services.
iii. "Medicare Set AsideAllocation" (MSA) means a report prepared under
requirements of the Medicare Secondary Payer statute and related regulations,
that describes the medical condition and likely future costs of care and
medications for Medicare covered treatments for an eligible Claimant.
iv. "Qualified Referrals" means: 1) Any worker's compensation settlement involving
a Medicarebeneficiary with a settlement value greater than $25,000.00 or any
Workers' Compensation settlement with a settlement value greater than
$250,000.00; either of which will require an MSA in accordance with CMS policy
guidelines previously published; AND 2) Any liability or no-fault auto insurance
settlement with a Medicarebeneficiary where the total settlement amount (TSA) is
greater than $20,000.00 or any Workers' Compensation settlement with a
Medicarebeneficiary when the TSA is less than $25,000.00, either of which will
require a CSA. Qualified Referrals that are outsourced to another vendor as
specified by Company are excluded from this definition.
v. "Services" means the collection of information by Service Company from
Company necessary to file any reports or notices as may be required to fully
comply with MMSEA, and to file all Mandatory Insurance Reports on behalf of
Company as may be required by CMS.
b) MQF (Medicare Query Function Agreement): Service Company's obligations to provide
MMSEA Mandatory Insurance Reporting is contingent upon the development of a MQF
service by the CMS for electronic confirmation of the Medicare entitlement status of
claimants similar to, or the same as, the MQF currently implemented or used for Group
Health Insurance Plans. In the event that the MQF is not developed or implemented by
CMS, Service Company shall have no obligation to provide MMSEA Mandatory
Insurance Reporting Services unless Service Company is able to establish a reasonable
alternative method of performing such MMSEA Mandatory Insurance Reporting
Services. Company agrees and understands that should Service Company be required to
develop an alternative solution by CMS, Service Company may be required to charge
additional fees to Company. Service Company shall advise Company of those additional
fees in writing as soon as it is aware of the fees, and Company will confirm and agree in
writing within ten days. The agreement for additional fees will constitute and be added
as an Addendum to this Agreement and will be in full force and effect as of the date of
the complete execution of the Addendum. If Company does not confirm and agree to the
additional fees as advised by Service Company, and no alternative fee arrangement can
be reached between Service Company and Company, Service Company shall have no
obligation to provide MMSEA Mandatory Insurance Reporting Services on behalf of
Company. However, the remaining obligations of the Parties shall remain in full force
and effect.
c) As a condition precedent to Service Company's obligations to provide MMSEA
Mandatory Insurance Reporting Services, Company shall:
•
i. "register" with CMS as required by MMSEA and subsequent memoranda from
CMS or coordinate the registration of their customers which may be Responsible
Reporting Entities (RREs) as required by MMSEA and subsequent memoranda
from CMS.
ii. designate Service Company as its "Reporting Agent" (RA) or require their
customers to designate Service Company as its RA or identify customers which
will utilize another RA and coordinate activities of all of their clients which may
be RREs under MMSEA.
iii. designate Service Company as its exclusive vendor for all of Company's
"Qualified Referrals" (those claims determined to require a MSA or a CSA as
defined herein and as modified/amended by federal and state laws.
iv. communicate any changes in CMS profile information, primary contact for
Company, Company termination of relationship, and any other changes that may
affect Service Company's ability to accurately report on behalf of Company.
v. provide a list of any and all of its customers which instruct Company to use a
vendor for MMSEA Mandatory Insurance Reporting other than Service
Company. Further, Company agrees to provide Service Company with written
confirmation of customer direction as well as any contact information as may be
requested by Service Company. Company agrees to hold Service Company
harmless for reporting errors and/or financial penalties incurred as a result of the
use of another vendor.
vi. Send corrected information within ten (10) days of receipt of the error report from
Service Company. Should Company fail to respond within that period, Service
Company will not be responsible for any damages of any nature, whether direct,
indirect, punitive or consequential, resulting from the failure of Company to
timely respond.
vii. Authorize Service Company to perform an MSA or CSA within ten (10) days of
being advised by Service Company that such a service is appropriate or required.
d) Service Company's obligations with regard to providing MMSEA Mandatory Insurance
Reporting shall be as follows:
i. Service Company will deter mine what MMSEA reporting requirements are
imposed on Company and will promptly advise Company of all such reporting
requirements including any new or revised MMSEA Mandatory Insurance
Reporting obligations as they may arise, in sufficient detail to allow Company to
provide all required information to Service Company.
ii. Upon receipt of all fields of information requested by Service Company via
electronic transfer, Service Company will conduct Medicare entitlement research
to determine if the Claimant is a Medicare beneficiary.
iii. If the Claimant is a Medicare beneficiary, Service Company will advise Company
of this status and, when required to do so, will commence efforts to determine if
there have been any Medicare Conditional Payments.
iv. When determining that a Claimant is a Medicare Beneficiary, Service Company
will file, electronically, with CMS all initial information which may be required
by MMSEA and any ongoing required reports.
v. On files which are being prepared for settlement and involving a Medicare
Beneficiary, Service Company will utilize the services of an outside vendor to
initiate research of Conditional Payments with the Medicare Secondary Payer
Lead Recovery Contractor (MSPRC) to determine the amount of Conditional
Payments alleged by CMS. All fees and costs charged by the outside vendor will
be paid by Service Company as an Allocated Loss Expense.
vi. If Service Company determines that there are Medicare Conditional Payments on
a file being prepared for settlement, Company will establish a threshold of
$2,500.00 for Service Company to automatically begin negotiating the
Conditional Payment amount with the MSPRC at Service Company's standard fee
for such services or at special fees for such negotiation service as may be
negotiated with Company.
vii. If Service Company receives an "Error Notice" from CMS related to information
which had been provided by Company, Service Company will transmit this Error
Notice or information to the designated contact department or employee of
Company within five (5) days of receipt of the Error Notice.
viii. If Service Company determines that an MSA or CSA is appropriate or required
for a settlement in accordance with the established Company protocols, it will
utilize the services of an outside vendor to prepare the appropriate or required
MSA or CSA and Service Company will pay the outside vendor as an Allocated
Loss Expense.
2.4 Privacy and Security over Personal Customer Information
a) Service Company agrees to comply with all federal, state and local laws, rules,
regulations, and other requirements applicable to the conduct of business which is the
subject of this Agreement, including, without limitation, any licensing, privacy, non-
disclosure or disclosure requirements, and any requirements under the Health Insurance
Portability and Accountability Act of 1996 (HIPPA) or any other federal or state law, rule
or regulation governing, limiting or prohibiting disclosure of Personal Customer
Information (as defined herein) regarding any insureds or any other persons or entities
with whom the Company does business. Service Company shall also comply as necessary
with the requirements of the Fair Credit Reporting Act, Fair and Accurate Credit ansactions
Act, and the Gramm-Leach-Bliley Act of 1999, 15 U.S.C. §§ 6801 et seq., and any and all
applicable federal and state laws and regulations implementing and amending these acts.
b) Service Company agrees that the term "Personal Customer Information" includes
information in any format (paper, electronic, or stored on media, etc.) that Service
Company becomes aware of as a result of this Agreement and that all such Personal
Customer Information is confidential and proprietary in nature, and that Service
Company is required by law to protect and keep confidential all nonpublic personal
information and personally identifiable health information obtained from customers, and
that said information shall not be divulged by Service Company to any third Parties or
used in any manner other than in connection with this Agreement or as permitted by law.
Service Company shall maintain the confidentiality of all information supplied to or
developed by it relating to the claims administered under this Agreement, and shall not
disclose such information without the prior written consent of the Company, or as
otherwise authorized by the provisions of this Agreement, or in response to the
requirements of a valid order by a court of competent jurisdiction or other governmental
body, or is otherwise required by law.
c) Service Company shall not use the Personal Customer Information other than for the
purposes of its business, and shall disclose it only to those employees of Service
Company with a specific need to know. Accordingly, Service Company shall:
i. establish and maintain appropriate security measures to protect the security and
confidentiality of such Personal Customer Information as outlined by the state and
federal regulations.
ii. protect against any anticipated threats or hazards to the security or integrity of
customer information.
iii. regularly maintain and monitor a security plan to protect against unauthorized
access to both physically and electronically maintained information or use of such
information that could result in substantial harm to customers, and review the
scope of security measures annually.
iv. otherwise ensure compliance with state and federal privacy laws and regulations
as set forth in Article 2.4, and any new federal or state laws and regulations as
they may be amended, and any regulations promulgated.
v. at the expiration of this Agreement the Service Company agrees to keep
confidential all Personal Customer Information until it is returned or destroyed.
vi. Service Company shall notify Company promptly if any breaches of security
occur that may affect Personal Customer Information and document responsive
actions taken and post-incident review of events.
vii. make available to Company the information required for Company to provide any
accounting of disclosures or for any other purpose in accordance with any
applicable laws.
viii. ensure that all Service Company employees comply with all of the requirements
of this Article 2.4.
d) The terms of paragraphs 2.4 a) through c), inclusive have been included herein based on
the understanding by the Parties that they may be required to comply with HIPAA. To
the extent that any relevant provision of HIPAA has been excluded, is materially
amended or interpreted in a manner that changes the obligations of Company or Service
Company under this Agreement, the Parties agree to negotiate in good faith an
amendment to this Agreement to give effect to such revised obligations. The terms of
this Agreement will be construed in light of any interpretation of and/or guidance on
HIPAA issued by the Department of Health and Human Services or the Office for Civil
Rights, from time to time.
ARTICLE 3
CLAIM SETTLEMENT AUTHORITY
3.1 Unless otherwise advised by the Company Service Company shall have authority in the
handling, reserving, and settlement of assigned claims under this Agreement, except
claims which involve or which are expected to involve aggregate expenditures of loss and
Allocated Loss Adjustment Expenses in excess of $50,000.00. For claims in excess of
$50,000.00, Service Company shall provide Company with a written settlement authority
request including all supporting documentation. Service Company shall notify Company
whenever a reserve is established equal to or greater than $50,000.00 or there is a change
in reserve of $50,000.00 or more. Unless otherwise advised by the Company, Service
Company shall continue to handle the claim, but shall not have authority to resolve and
settle the claim without written Company authorization.
3.2 The Company shall retain ultimate settlement authority for all claims serviced under the
Policy. Notwithstanding the authority delegated to Service Company under this
Agreement, Company shall have the option of taking over the handling and settlement of
any or all claims.
3.3 Service Company's claim handling shall comply with claims guidelines as set forth in
the Service Company's Program Handling Guidelines ("Guidelines"), which Guidelines
have been reviewed by Company and are acceptable as written, which are attached as
Exhibit C. The Guidelines may not be changed by Service Company without the
Company's prior written consent.
ARTICLE 4
COMPENSATION/REIMBURSEMENT
4.1 The Company agrees to pay Service Company a fee as set forth in Exhibit B, which is
attached hereto and made a part hereof.
4.2 Service Company shall be responsible for all expenses (other than actual claim payments
and Allocated Loss Adjustment Expenses) incurred in investigating and adjusting claims.
4.3 "Allocated Loss Adjustment Expenses" shall be defined as and include all out-of-pocket
expense items associated with the investigation, adjustment and settlement or defense of
claims, including without limitation field adjusting expenses, surveillance, medical cost
containment, hearings, experts,appraisal fees, fees for attorneys retained for or on behalf
of Company or insured, expert witness fees, court costs, fees for independent medical
examinations, witnesses' travel expense, extraordinary travel expense incurred by Service
Company at the request of Company, court reporters' fees, transcript fees, the cost of
obtaining public records and other similar fees, costs or expenses or as required for
investigation and pursuit of subrogation, salvage or deductible recovery on behalf of the
Company. Allocated Loss Adjustment Expense shall not include any part of the salaries
of employees of Service Company, its overhead, or other normal or ordinary costs
incurred in connection with the services provided under this Agreement or its business as
a whole. However, Allocated Loss Adjustment Expenses shall include the expense
associated with the retention of any additional temporary desk adjusters or
examinersrequired to handle claims arising from a catastrophe claims event.
ARTICLE 5
STATUS OF PARTIES
The Parties hereto agree that Service Company, its affiliated corporations, and the agents and
employees of Service Company and its affiliated corporations, in the performance of this
Agreement, shall act in an independent capacity as independent contractors and not as officers or
employees of Company, or any other affiliate of Company, and nothing contained in this
Agreement shall be construed to create the relationship of joint venture, partnership, or employer
and employee between the Company and Service Company.
ARTICLE 6
AUDIT RIGHTS
6.1 In order to assure itself of Service Company's compliance with the terms of this
Agreement, Company, upon reasonable notice to Service Company, shall have the right
to conduct audits of the files, books and records of Service Company, at its expense,
either with its own employees or independent outside auditors during normal business
hours.
6.2 Upon reasonable notice, Service Company shall permit authorized employees and
representatives of the Company to review the operations of Service Company during
normal business hours, both at its places of business and via online inquiry, in order to
evaluate the quality and accuracy of Service Company's employees and operations.
ARTICLE 7
REPRESENTATIONS AND WARRANTIES
7.1 Company warrants and represents that the transactions contemplated hereby are (i) within
the corporate powers of Company; (ii) have been duly authorized by all necessary
corporate action of Company; (iii) constitute the legal, valid and binding obligation of
Company, enforceable against it in accordance with its terms; and (iv) do not and will not
conflict with, result in a breach in any of the provisions of, or constitute a default under
the provisions of any law, regulation, licensing requirement, charter provision, by-law or
other instrument applicable to Company or its employees or to which Company is a Party
of may be bound.
7.2 Service Company warrants and represents that the transactions and activities
contemplated hereby are (i) within the corporate powers of Service Company; (ii) have
been duly authorized by all necessary corporate action of Service Company; (iii)
constitute the legal, valid and binding obligation of Service Company, enforceable
against it in accordance with its terms; and (iv) do not and will not conflict with, result in
a breach in any of the provisions of, or constitute a default under the provisions of any
law, regulation, licensing requirement, charter provision, by-law or other instrument
applicable to Service Company or its employees or to which Service Company is a Party
of may be bound.
ARTICLE 8
ARBITRATION
8.1 As a condition precedent to any right of action hereunder, any dispute or difference
between the Company and the Service Company relating to the interpretation or
performance of this Agreement, including its formation or validity, or any transaction
under this Agreement, whether arising before or after termination, shall be submitted to
binding arbitration.
8.2 Upon written request of any Party, each Party shall choose an arbitrator and the two
chosen shall select an umpire. If either Party refuses or neglects to appoint an arbitrator
within 30 days after receipt of the written request for arbitration, the requesting Party
may appoint a second arbitrator. If the two arbitrators fail to agree on the selection of an
umpire within 30 days of their appointment, then each arbitrator shall propose to the
other three names of a potential third arbitrator within twenty (20) days of the date on
which the second arbitrator is appointed. Each arbitrator shall strike from the other's list
two of the names. The third arbitrator shall then be drawn by lot.. All arbitrators shall be
active or retired officers of insurance, reinsurance companies, or property & casualty
third Party administrators, and disinterested in the outcome of the arbitration. Each Party
shall submit its case to the arbitrators within 30 days of the appointment of the umpire.
8.3 The Parties hereby waive all objections to the method of selection of the arbitrators, it
being the intention of both sides that all the arbitrators be chosen from those submitted by
the Parties.
8.4 Each Party shall be entitled to take depositions of the other Party's witnesses, officers,
directors, employees, or agents. The arbitrators and umpire shall interpret this
Agreement as an honorable undertaking and not merely a legal obligation; they are
relieved of all judicial formalities and may abstain from following the strict rules of law,
and they shall make their award with a view to effecting the general purpose of the
Agreement in a reasonable manner, rather than in accordance with a literal interpretation
of the language.
8.5 A majority decision, as between the two arbitrators and the umpire shall be final and
binding upon the Parties. The arbitrators shall render their decision within thirty (30)
days of the close of the Parties' case. Judgment upon the final decision of the arbitrators
and umpire may be entered in any court of competent jurisdiction. The arbitration award
shall be an award of compensatory monetary damages, but not punitive or exemplary
damages. The award shall be made with due regard to the custom and usage of the
insurance business and shall be in writing stating the factual and legal basis for the award.
8.6 The expense of the arbitrators and of the umpire shall be borne equally between the
Parties of the arbitration. Arbitration shall take place in the County of Orange, City of
Orlando, State of Florida unless some other place is mutually agreed upon by the Parties
to the arbitration. Except as provided above, arbitration shall be based, insofar as
applicable, upon the rules and procedures of the American Arbitration Association
(AAA).
ARTICLE 9
INDEMNITY AND INSURANCE
9.1 Service Company agrees to indemnify, defend and hold harmless Company, its
subsidiaries, successors and assigns, and their directors, shareholders, officers, agents and
employees, from and against any and all claims, demands, actions, proceedings, liability,
losses, damages, judgments, regulatory fees or fines, cost or expenses, including extra-
contractual, bad faith, punitive, exemplary, compensatory, or consequential damages and
attorney's fees, made or instituted against or incurred in connection with claims, claims
handling, or demands for damage of any nature whatsoever, to the extent arising from or
caused by any failure of Service Company, or its employees or representatives, to
perform its obligations under or relating to this Agreement, and for any bad faith,
negligence, or gross negligence of Service Company, its directors, officers, agents or
employees, unless the act or omission was done pursuant to the requirements of this
Agreement, the Program Handling Guidelines, or at the direction of the Company.
9.2 Company agrees to indemnify, defend and hold harmless Service Company, its
subsidiaries, successors and assigns, and their directors, shareholders, officers, agents and
employees, from and against any and all claims, demands, actions, proceedings, liability,
losses, damages, judgments, regulatory fees or fines, costor expense, including extra-
contractual, bad faith, punitive exemplary, compensatory, or consequential damages and
attorney's fees, made or instituted against or incurred in connection with claims or
demands for damages of any nature whatsoever, to the extent arising from or caused by
any failure of Company, or its employees or representatives, to perform its obligations
under or relating to this Agreement, and for any action taken or omitted to be taken by
Service Company pursuant to the requirements of this Agreement, the Program Handling
Guidelines, or at the direction of the Company.
9.3 Service Company shall, at all times while obligations under this Agreement remain to be
performed by Service Company, maintain in force such insurance as are normal and
customary or required by law to protect itself and its clients, including the following.
a) Workers' Compensation Insurance under the laws of the states in which operations are
conducted.
b) Comprehensive General Liability Insurance with limits of not less than $2 million
including contractual liability and personal injury for libel, slander and assault insuring
this Agreement.
c) A Fidelity bond providing coverage for all officers and other employees of Service
Company (including "money and securities" coverage) in the amount not less than $1
million.
d) Errors and Omissions coverage with limits of not less than $5 million.
Company shall have the right to inspect each of the above-mentioned policies and bonds and
Service Company shall cause its insurers to provide Company with a certificate of insurance or
other evidence of coverage which provides Company with 30 days notice of cancellation.
ARTICLE 10
DEFAULT
10.1 The following are events of default under this Agreement:
a) Any breach of a material term of this Agreement which is not substantially cured by
breaching Party within 10 days after receipt of notice of such breach by the other Party.
b) The discovery by Company or Service Company of the falsity of any representation or
warranty made by Company or Service Company pursuant to Article 7 hereof.
c) The levying of any attachment, execution or any process against the Company or Service
Company which is not promptly removed, or the filing of any petition under any
bankruptcy statute by or against Company or Service Company or the appointment of any
custodian, receiver or trustee to take possession of the Company or Service Company's
assets which is not set aside or terminated within 30 days from the occurrence thereof.
10.2 The failure of Company or Service Company to declare a default upon the occurrence of
an event constituting a default shall not waive the Company's or Service Company's
right to declare a default upon the occurrence of any subsequent event.
ARTICLE 11
TERMINATION
11.1 This Agreement may be terminated by Company or Service Company as follows:
a) Upon 90 days prior written notice without cause.
b) Upon 10 days prior written notice in the event of a default in this Agreement by the other
Party.
c) Immediately upon written notice in the event of fraud, abandonment, gross or willful
misconduct, insolvency, or lack of legal capacity to act by the other Party.
d) Upon 60 days prior written notice in the event of the final termination of all Programs, or
any renewals or extensions thereof.
11.2 Notwithstanding the termination of this Agreement as hereinabove provided, the
provisions of this Agreement shall continue to apply to the extent needed for all
obligations and liabilities incurred by each Party hereunder prior to such termination to
be fully performed and discharged by such Parties, including, without limitation, Service
Company's obligation to adjust and handle to their conclusion all claims incurred under
the Programs prior to the effective date of any termination and to comply with all aspects
of this Agreement with respect to the adjusting, reporting and settlement of such claims.
11.3 Service Company agrees that Company shall have the right in the event of a termination
of this Agreement to immediate possession of all claims files and other records relating to
such claims and that this right may be exercised at any time after termination. In the
event Company takes over handling of any or all outstanding claims after termination,
Service Company agrees to cooperate with and instruct its employees to cooperate with
Company in connection with the Company's handling of such claims. The Company will
pay any additional allocated expense incurred. The Company will not pay Service
Company claim handling fees for claims not assigned to the Service Company after the
termination date
ARTICLE 12
CONFIDENTIAL INFORMATION
12.1 The Parties hereby agree to treat as confidential any and all reports, information, and data
relating to, obtained by, prepared or assembled by, or given to the other or developed as a
result of information supplied by or on behalf of either party, under this Agreement, or by
reason of, or relating to, the transaction contemplated by this Agreement, including but
not limited to any materials, presentations, records, and all matters affecting or relating to
the proposed business and operations under this Agreement, and further including
personally identifiable information that is not publicly available pursuant to the Gramm-
Leach-Bliley Act of 1999, which may include, but is not limited to, application
information, health information, claims information, account balance or payment
information, inventions, designs, technological developments and processes, "know-
how," operational methods, and financial information (including the SAS Number 70
Report on Controls Placed in Operation and Tests of Operating Effectiveness),
(such information being collectively referred to herein as "Confidential Information").
12.2 The Parties shall each take appropriate steps to ensure that all Confidential Information is
kept confidential by the respective parties and each of their directors, officers, principals,
shareholders, employees, agents and advisors, and that such Confidential Information
will not be divulged, disclosed or communicated to any person, firm, association,
corporation or other entity, during or subsequent to the term of this Agreement. The
parties shall implement adequate safeguards to assure the security and confidentiality of
Confidential Information, including without limitation, the following: (i) requiring
employees, subcontractors and agents to maintain the strict security and confidentiality of
Confidential Information required of receiving party(ies) under this Agreement; (ii)
immediately reporting to disclosing party any use or disclosure of Confidential
Information prohibited by the terms of this Agreement; (iii) implementing reasonable
physical, administrative and technological safeguards to prevent unauthorized access or
interception of Confidential Information; and (iv) not using or disclosing Confidential
Information in any manner that would be considered a violation by disclosing party of the
information privacy and security provisions of the Health Insurance Portability and
Accountability Act and its respective implementing regulations as may apply to
Disclosing Party.Provided, however, that (i) disclosure of any Confidential Information
to which the other party has consented in writing may be made; and (ii) any Confidential
Information may be disclosed pursuant to applicable law, regulation or legal process; and
(iii) Confidential Information may be also disclosed as reasonably necessary to auditors
of either party and regulatory authorities, accountants, counsel, employees, reinsurers,
agents or subcontractors to the extent that they are required to do so; however, any such
disclosure may be made only after giving disclosing Party prior notice of the potential
disclosure as soon as reasonably practical before such disclosure is made so that a
protective order or other appropriate remedy may be sought or compliance with the
provisions of this Agreement may be waived. If such protective order or other remedy is
not obtained or if compliance with any provision of this Agreement is waived in writing,
receiving Party(ies) will furnish only that part of Confidential Information that, upon the
advice of receiving party(ies) legal counsel, is legally required and will exercise its
reasonable efforts to obtain reliable assurance that confidential treatment will be accorded
such information.
12.3 In the event of a breach of this section relating to Confidential Information, the affected
Party shall be entitled to seek specific performance an injunctive or other equitable relief
as a remedy for any such breach, which shall not be deemed to be the exclusive remedy
for such breach, but shall be in addition to all the remedies available at law or equity.
12.4 The term "Confidential Information" as used in this Agreement does not include
information which (i) was or becomes generally available to the public other than as a
result of the disclosure by or on behalf of a party or its directors, officers, employees,
agents, affiliates, independent contractors, or representatives; (ii) was or becomes
available on a non-confidential basis from a source other than a party or its
representatives, provided that such source is not bound by a confidentiality agreement
with, or similar obligation; (iii) was publicly known or otherwise known on a non-
confidential basis prior to being made available to receiving party; or (iv) is
independently developed by receiving party without reliance on the Confidential
Information.
ARTICLE 13
GENERAL PROVISIONS
13.1 The subject headings of the Articles of this Agreement are included for purposes of
convenience only and shall not affect the construction of interpretation of any of its
provisions.
13.2 This Agreement sets forth the entire understanding of the Parties and supersedes and
merges any prior agreement, understanding, promises, representations, warranties and
arrangements relating to the subject matter hereof. No supplement, modification or
amendment of this Agreement shall be binding unless executed in writing by all the
Parties. No waiver of any of the provisions of this Agreement shall be deemed, or shall
constitute, a waiver of any other provision, whether or not similar, nor shall any waiver
constitute a continuing waiver. No waiver shall be binding unless executed in writing by
the Party making the waiver. The failure of either Party to insist upon strict compliance
with any provision of this Agreement, or to exercise any right or remedy under this
Agreement, shall not constitute a waiver by such Party of the provision or prevent such
party from exercising such right or remedy in the future.
13.3 Service Company may not assign, sell, transfer or otherwise convey, pledge or encumber
any of its rights or interests under this Agreement without the prior written consent of the
Company.
13.4 Except as otherwise provided herein, the provisions hereof shall inure to the benefit of,
and be binding upon, the successors, heirs, executors and administrators of the Parties
hereto. This Agreement is for the sole and exclusive benefit of the Parties andtheir
successors and permitted assigns, and no third party is intended to or shall have any rights
hereunder.
13.5 This Agreement shall be governed by and construed in accordance with the laws of the
State of Florida. In the event that any provision of this Agreement is held by a court of
competent jurisdiction to be unenforceable or void in any jurisdiction, the other
provisions of this Agreement shall remain in full force and applicable Florida law shall be
construed in order to effectuate the purpose and intent of this Agreement.
13.6 This Agreement may be executed in two or more counterparts, each of which shall be
deemed an original, but all of which together shall be deemed one and the same
instrument.
13.7 If any provision of this Agreement is held to be invalid or unenforceable, such
impediment shall attach only to such provision and shall not render invalid or
unenforceable any other provision of this Agreement. In the event a court of competent
jurisdiction modifies any provision of this Agreement, then this stricken provision shall
be replaced, to the extent possible, with a legal, enforceable, and valid provision that is as
similar in tenor to the stricken provision as is legally possible, and the remaining
provisions of this Agreement shall remain in full force and effect and the modified
provision shall be abided by the Parties as so modified by the court.
13.8 Each notice or other instrument referred to in this Agreement shall be in writing and shall
be deemed "given" to a Party (a) when delivered by hand, (b) on the business day after it
is delivered to a recognized overnight courier service for overnight delivery to a Party, (c)
three (3) business days after it is mailed to a Party, postage prepaid and via registered or
certified mail, return receipt requested, to the Party at the address set forth below or at
such other address as such Party, by notice to the other Party, may designate from time to
time.
If to Company:
The City of Opa-Locka
Address
City, State, Zip
And
Company
Address
City, State, Zip
EXHIBIT A
PROGRAMS
Company shall have the authority and responsibility to provide claims adjusting and
administration services to conclusion of each claim file or incident assigned to it by the
Company in connection with claims or losses relating to occurrences under policies of
insurance issued pursuant to the Programs:
1. Program. (Service Company SHALL provide
MMSE Reporting in accordance with Article 2, Section 2.3)
2. Program. (Service Company SHALL NOT provide
MMSE Reporting in accordance with Article 2, Section 2.3)
EXHIBIT B
COMPENSATION
For claims incurred under the Program and assigned to it by Company from April 10, 2012 until
termination, Service Company agrees to accept as its complete and total compensation claims
servicing fees as set forth below:
As full compensation for Claim Adjusting Services to be provided under this Agreement,
Employer agrees to pay Claim Administrator a fee of $10,000.00 annually to handle all claims
assigned under the Agreement referenced above. Said fees shall be paid by the Employer within
thirty (30) days of the effective date of this agreement.
Compensation for each subsequent year of a multi-year contract will be subject to the greater of
an increase of 3.5% or the percentage increase as reported by the U.S. Department of Labor -
Bureau of Labor Statistics (hrtp://www.bIs.gov/cpi/home.htm) for the Consumer Price Index for All
Urban Consumers (CPI-U) for the U.S. City Average, All Items, covering the prior twelve month
period, valued as of the month ending two months prior (to allow time for reports to be
published) to the commencement date of the contract for each Term or Renewal Term.
•
EXHIBIT C
PROGRAM HANDLING GUIDELINES
Program:
NARS Program ID:
Insurer:
Program Manager:
General Agent:
Risk Class:
Program Contacts:
Reinsurance Broker:
Reinsurance Contacts:
Risk Information: The Program involves
Coverage Data:
First Notice: New losses will be reported by
Reserves: NARS may reserve on any one claim/occurrence up to the following amounts:
$ . Express written authority must be obtained in writing from and the claim file
documented with the approval prior to increasing reserves above these amounts.
Notice Only Losses:
Reporting: NARS must provide a written report to as soon as reasonably possible following
information that reveals a claim involves any of the following:
Subsequent reports are required upon significant development or absent same, every
months thereafter(unless specifically directs otherwise) until all exposures under the
claim are fully extinguished and the claim is closed with a final report, or directs that no
further reporting is required
Accounting: .
Deductible Collection/Subrogation Collection:
Outside Vendors- (Attorneys/Appraisers/Adjusters):
Designated Handlers: Claims will be handled by the Unit managed by
Reinsurance Reporting:
Settlement Authority: NARS has authority to settle claims up to: $ . Express written
authority must be obtained in writing from and the claim file documented with the
approval prior to settling any claim in excess of the stated amount(s) or on claims with a
coverage dispute. Examiners should follow NARS' procedures for authority above their
individual authority levels.
Audits:
Special Handling Instructions:
Special Coding: