GENERAL AGENT AGREEMENT. BCBSAZ Medicare Supplement Policies

Transcription

1 GENERAL AGENT AGREEMENT BCBSAZ Medicare Supplement Policies This General Agent Agreement ( Agreement ) is made effective the last date of signature below (the Effective Date ) by and between Blue Cross Blue Shield of Arizona, an Arizona non-profit corporation and an independent licensee of the Blue Cross and Blue Shield Association ( Company ), and Berwick Insurance Group, LLC ( General Agent ). General Agent expressly acknowledges its understanding that (a) this Agreement constitutes a contract between General Agent and Company, which is an independent corporation operating under a license from the Blue Cross and Blue Shield Association ( Association ), an association of independent Blue Cross and Blue Shield Plans, permitting Company to use the Blue Cross and Blue Shield Service Marks in Arizona, and (b) Company is not contracting as the agent of the Association. General Agent further acknowledges and agrees that it has not entered into this Agreement based upon representations by any person other than Company and that no person, entity, or organization other than Company shall be held accountable or liable to General Agent for any of Company s obligations created under this Agreement. This paragraph shall not create any additional obligations whatsoever on the part of Company or General Agent other than those obligations created under other provisions of this Agreement. WHEREAS, General Agent desires to assist Company with the marketing of BCBSAZ Medicare Supplement policies in Arizona, pursuant to the terms of this Agreement; and WHEREAS, all subsequent references in this Agreement to Company s plans, Company s Medicare Supplement Plans and/or Company s business shall mean only the BCBSAZ Medicare Supplement policies; and NOW, THEREFORE, the parties hereby agree as follows: 1. Appointment. Company appoints General Agent to represent it in the marketing and sale of its Medicare Supplement policies in accordance with this Agreement. Company also shall appoint, if required by law, any agent (hereafter agent or subagent selling agent or selling broker ) engaged by General Agent to be retained to represent BCBSAZ in the marketing and sale of the Medicare Supplement policies in accordance with this Agreement, provided that any such agent agrees to comply with the terms of this Agreement. General Agent shall provide Company with a list of all agents engaged directly or indirectly by General Agent to sell the BCBSAZ Medicare Supplement policies and shall promptly provide written updates to Company as changes occur. 2. Relationship. General Agent s relationship to Company shall be that of an independent contractor, and nothing contained in this Agreement shall be construed to make General Agent, any agent, or any of their employees, employees of Company. Neither General Agent nor any agent has any authority except as expressly set forth in this Agreement. No authority shall be inferred from the authority expressly granted. 2.1 Company and General Agent acknowledge that BCBSAZ s business is highly regulated. Company will require, among other things, on-going specific education and training with regard to the BCBSAZ Medicare Supplement policies for General Agent and agents as deemed appropriate by Company to satisfy all applicable state and federal requirements. General Agent shall fully cooperate with any education or training request made by Company. 1

2 2.2 General Agent acknowledges and agrees that Company shall audit and have compliance oversight with respect to the activities hereunder of General Agent and agents. General Agent shall promptly take corrective action to address any issues identified by Company in connection with its audit and oversight activities. 3. Authority and Responsibilities of General Agent. Company authorizes General Agent to perform certain services, and General Agent agrees to provide to Company certain services, as outlined in this Agreement, relating to the marketing and sale of BCBSAZ Medicare Supplement policies. The services which General Agent shall perform and provide, as authorized by Company hereunder, shall include the following: 3.1 To develop, prospect, and enroll leads that become members of BCBSAZ s Medicare Supplement policies ( Members ); 3.2 To provide weekly to Company the following information regarding leads provided by Company: (a) Disposition of each lead, in terms developed by Company, which shall include call dates and results (e.g. appointment/no appointment with reasons and next steps), appointment results including reasons for non-enrollment, current healthcare coverage, and current physician. (b) Number of leads worked and the quantity of calls conducted to reach each prospect. (c) Such other information as may be requested by Company regarding leads provided by Company. 3.3 To require all agents to execute the Individual Agent Addendum attached hereto as Attachment A, which is incorporated herein by reference; 3.4 To require that all agents participate in training sessions, which shall include review of all training materials provided by Company, regarding the coverage and benefit design of every Medicare Supplement policy sold under this Agreement and any state and federal laws applicable to the Medicare Supplement policies including, without limitation, the marketing of such Medicare Supplement policies. General Agent shall bear the costs of travel related to said training; 3.5 To provide to all agents materials approved by Company for the training program, ensure completion and execution of any and all documents provided by Company, and to monitor and certify to Company ongoing compliance by agents with the requirements and principles enunciated in the training program and state and federal laws; 3.6(a) To provide to agents applications and similar related documents approved by Company for use with prospects, and ensure proper completion of enrollment documents in accordance with Company s requirements and state and federal laws. 3.6(b) To forward completed documents to Company for processing within no more than forty-eight (48) hours of completion by prospect; 2

3 3.7 To: (a) comply with all state and federal laws and required practices regarding marketing of Medicare Supplement policies, (b) use only Company collaterals that have been approved in accordance with applicable state and federal law; and (c) conform to Company s sales scripts, presentations, and sales materials; 3.8 To refrain from collecting and ensure that any agents shall refrain from collecting, under any circumstance, any premium, fee or payment from individual prospects, in connection with the coverage quoted by and written through General Agent; 3.9 To ensure General Agent and all agents comply with Company s marketing guidelines and all Medicare supplement laws and regulations governing the marketing of Medicare Supplement policies, as the same may be modified from time to time, including, without limitation, any applicable provisions regarding outbound telephone marketing and prohibition on door-to-door solicitation; 3.10 To maintain records of all activities performed pursuant to this Agreement, including, without limitation evidence of state licensure in effect for General Agent and all agents, training, statistical performance and performance evaluations; 3.11 To compensate and pay commissions as described in Section 11 and Attachment B (Compensation) attached hereto and incorporated herein by reference; xxx 3.12 To provide Company with such information and data as is necessary for Company to meet any reporting obligations under state and/or federal law; 3.13 To (i) maintain and provide a defined agent recruitment and screening process to ensure at least 40% of subagents are actively writing Company s Medicare Supplement policies; (ii) timely distribute subagent contracts and ensure that contracts are signed and submitted to Company for agent setup; (iii) ensure that all subagents are trained to sell BCBSAZ s Medicare Supplement policies and continue receiving appropriate renewal commission payments; (iv) be responsible for routine communications to subagents about Company s Medicare Supplement products, processes and services; (v) act as subagents first line of contact with respect to agent inquiries on Company s Medicare Supplement products and processes; (vi) ensure subagents issues are resolved within hours of receipt; (vii) ensure all subagents fully comply with all Medicare Supplement laws and regulations; (viii) establish a disciplinary process for agents who violate state and/or federal laws, which process shall include among other things formal written guidelines with steps that lead to a subagent s termination; (ix) schedule any agent ride-alongs GA determines are necessary to observe agents performance during sales appointments and document General Agent s observations; and (x) provide Company with monthly status reports that recap all oversight activities performed during the preceding month To perform the functions stated in Attachments B and (B)(i) which are attached hereto and incorporated herein by reference and such other functions as Company shall reasonably request. 4. Obligations of Company. 4.1 Company shall provide General Agent assistance and support information as deemed appropriate by Company, including training materials and training sessions in the coverage, benefit design of each product sold under this Agreement, and state and federal laws applicable to the products; and 3

4 4.2 Company shall provide General Agent, at Company s cost, such printed materials as may be deemed appropriate by Company, including applications, enrollment forms, and similar related documents approved by Company for use with prospects. 4.3 Company may, from time to time, provide General Agent with leads. All leads provided by Company to General Agent shall be used solely for promoting BCBSAZ s Medicare Supplement policies and otherwise soliciting Medicare Supplement business for Company as provided under this Agreement. 5. Restrictions on General Agent s Activities. General Agent does not have the authority to perform any of the following acts or to commit Company to perform any of the following acts: 5.1 To utilize Company provided leads to promote, sell, or enroll a prospect in Medicare Supplement policy that is not underwritten by Company; 5.2 To waive, modify, or change any terms, rates, conditions, or limitations of any certificate, policy or contract, marketing documents, benefits, benefit plan descriptions, plan rules or other materials provided by Company; 5.3 To bind or commit Company on any risk in any manner; 5.4 To collect or receive any premiums, fee or other payment from individual prospects; 5.5 To reinstate any coverage terminated; 5.6 To adjust or settle any claims; 5.7 To participate in any legal proceedings pertaining to Company s business as a representative of Company; 5.8 To distribute any materials which have not been furnished or approved by Company including, without limitation, the following: (a) Printed and published material, audiovisual material, or descriptive literature used in direct mail, newspapers, magazines, radio and television scripts, billboards, and similar displays; (b) Descriptive literature and sales aids of all kinds including without limitation circulars, leaflets, booklets, illustrations, computer proposals, computer disks, rating software, and form letters; or (c) All letterheads, business cards and written materials containing Company name or logo. 6. Non-Solicitation. General Agent shall not solicit or recruit Company s sales representatives for the purposes of marketing and/or selling insurance, Medicare or Medicare related products, as employees, independent contractors, or agents for the term of the Agreement and for a period of one (1) year following termination of the Agreement. 7. Indemnification and Insurance. 7.1 General Agent shall indemnify and hold harmless Company from any and all losses, costs, claims, demands, damages, penalties and attorneys fees caused by or arising from General Agent s negligence, misconduct, or breach of this Agreement that is 4

5 attributable to General Agent, any agent, or their officers or employees. General Agent shall indemnify and hold Company harmless from any claim for compensation or benefits from agents. 7.2 General Agent shall obtain and maintain in full force and effect at all times during the term of this Agreement general liability and casualty insurance coverage and any such other insurance coverage conforming to industry standards for the services to be provided hereunder with limits equal to or exceeding coverage limits acceptable to Company. General Agent shall provide Company with evidence of such insurance coverage at the commencement of the Agreement and thereafter upon the request of Company. 8. Limitation of Liability. 8.1 General Agent s sole, exclusive remedy for any breach by Company of this Agreement or for any other damage resulting from Company s performance under this Agreement shall be limited to money damages equal to the lesser of (i) General Agent s actual damages, or (ii) the sum of all amounts paid to General Agent by pursuant to this Agreement. 8.2 TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, IN NO EVENT SHALL COMPANY OR ITS AFFILIATES BE LIABLE FOR ANY LOST PROFITS, LOST SAVINGS OR ANY CONSEQUENTIAL, INCIDENTAL, INDIRECT, SPECIAL, PUNITIVE, OR OTHER DAMAGES WHATSOEVER (INCLUDING, WITHOUT LIMITATION, DAMAGES FOR LOSS OF BUSINESS PROFITS, BUSINESS INTERRUPTION, LOSS OF BUSINESS INFORMATION, OR OTHER PECUNIARY LOSS) ARISING OUT OF THIS AGREEMENT EVEN IF COMPANY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES, OR FOR ANY OTHER CLAIM BY GENERAL AGENT OR FOR ANY THIRD PARTY CLAIM. 5

6 9. Licenses. General Agent agrees that General Agent and each agent engaged by General Agent shall be properly licensed in Arizona in order to provide services and receive compensation (in the case of General Agent) and commissions (in the case of each agent) under this Agreement. General Agent shall ensure that all agents are properly licensed and appointed, and shall, upon request, provide Company with evidence of licensure. Failure of General Agent or any agent to maintain the required license(s) may result in termination of this Agreement in whole or in part for cause in accordance with Section 12.3 of this Agreement. 10. Reservation of Rights by Company. Company specifically reserves the right to: 10.1 Discontinue or withdraw from sale and/ or marketing any product, including, without limitation, any Medicare Supplement policy, certificate, policy, contract, marketing materials, marketing strategy, special marketing concept or any other information, materials or concepts relating to any Medicare Supplement policy in any jurisdiction; 10.2 Modify, change, or amend any certificate, policy, contract, or premium rate; 10.3 Cease doing business in any market segment in any jurisdiction; 10.4 Modify its business practices or operations in any other manner deemed appropriate by Company in its discretion; 10.5 Amend any of the terms of this Agreement, upon thirty (30) days written notice to General Agent unless General Agent provides notice of termination prior to the effective date of such amendment. The parties may otherwise mutually agree to amend the terms of this Agreement, and all such amendments shall be in writing and signed by the parties. Notwithstanding the foregoing, the compensation rates shall be subject to change by Company in accordance with Section 11.3, below; and 10.6 Revoke any rights and responsibilities for sale and marketing under this Agreement or impose such other remedial action(s) deemed appropriate by Company, in its sole discretion, in the event that compliance with applicable marketing guidelines or requirements by General Agent or its agents is unsatisfactory to Company, in Company s sole discretion, or state and federal law Suspend or terminate appointment of any agent engaged by General Agent to represent Company in the marketing and sale of its Medicare Supplement policies for any reason. Termination of any individual agent shall not terminate this Agreement with respect to General Agent or any other agent engaged by General Agent and appointed by Company to represent Company. 11. Compensation Company shall pay General Agent the compensation specified in Attachment B Compensation will be paid provided that: (a) General Agent is living, or if a corporation, the corporation remains an entity in good standing; and (b) General Agent is actively and continuously engaged as a licensed general agent under Arizona law for the business written pursuant to this Agreement; and 6

7 (c) General Agent is in good standing with the Medicare and Medicaid programs and not excluded from participating in any federal health care program; and (d) Neither General Agent nor any agent shall share or otherwise split commission or compensation received on Medicare Supplement business pursuant to this Agreement with any other person or entity without the express prior written consent of Company Company may at any time, upon written notice to General Agent, change the compensation rates payable to General Agent under this Agreement. Any such change shall be upon written notice to General Agent and shall apply only with respect to compensation payable under this Agreement on or after the effective date referred to in such notice Company shall have no obligation to pay commissions to any subagent (or to forward commissions to General Agent for General Agent s distribution to a subagent) unless, in addition to all other requirements under this Agreement, the subagent is both licensed to sell BCBSAZ s Medicare Supplement policies and is contracted with General Agent. For example, if a subagent is licensed and contracted with General Agent in year one, but in year two the subagent is licensed but no longer contracted with General Agent, Company shall have no obligation to pay any subagent commissions for business sold in any year by the now non-contracted subagent. General Agent shall inform subagent, prior to any sale by subagent under this Agreement, of the provisions of this Section 11.4 and elsewhere in this Agreement that affect subagent commissions Upon a termination of this Agreement for any reason: (a) No compensation shall be payable to General Agent after the effective date of termination; and (b) After the effective date of termination, Company shall have no obligation to pay any commission to any subagent for sales made by him/her regardless of whether the sale was before or after termination, unless Company has contracted directly with such subagent. 12. Term and Termination. This Agreement shall commence on the Effective Date, shall continue for a term of twelve (12) months and shall renew annually unless terminated pursuant to any of the following: 12.1 This Agreement may be terminated without cause by Company or General Agent upon sixty (60) days prior written notice This Agreement may be terminated by Company immediately if General Agent fails to meet the requirements of Section 3 of this Agreement This Agreement may be terminated by Company in whole or in part as determined by Company in its sole discretion for cause immediately upon the occurrence of the event giving rise to the termination, including without limitation the following: (a) General Agent fails to be duly licensed in Arizona, including the expiration, suspension, termination, or revocation of General Agent s licensure; 7

8 (b) General Agent is disciplined or reprimanded by any state or federal regulatory authority in any way in connection with performance of its duties under this Agreement; (c) Any agent performs services for General Agent under this Agreement after having been disciplined or reprimanded by any state or federal regulatory authority in any way in connection with performance of his/her/its duties. (d) General Agent is convicted of a felony; (e) General Agent fails to maintain insurance coverage in the amounts required by Company; (f) General Agent fails to provide proof of adequate insurance coverage within thirty (30) days of Company s written request; or (g) General Agent is in material breach of this Agreement. A material breach includes, without limitation, the failure by General Agent or an agent to comply with Applicable Law. As used in this Agreement, Applicable Law means applicable state law and regulations, federal law and regulations, and any state and federal law program guidelines and instructions. (h) General Agent is excluded from participation in any federally funded health care program, including Medicare and Medicaid General Agent must notify Company within ten (10) days of the occurrence of any of the events listed above. General Agent must notify Company immediately of the disciplining or reprimand by any state or federal regulatory entity of any agent, or of any issue related to the ability or an agent to obtain or maintain licensure in Arizona Upon expiration or termination of this Agreement, General Agent shall turn over to Company all records and accounts of business covered by this Agreement. 13. Non-Assignability. General Agent may not assign this Agreement to any third party without Company s prior written consent. Company may assign its rights and obligations, in whole or in part, to any of its affiliates, including without limitation any successor-in-interest, without the consent of General Agent. Company may not assign its rights and obligations to any unaffiliated third party without General Agent s written consent. 14. Confidentiality of This Agreement. The parties agree that the terms and conditions of this Agreement will not be disclosed to anyone, unless required by law, and shall remain confidential between the parties to this Agreement. 15. State and Federal Law Requirements Addendum. The provisions of the state and federal law Requirements Addendum attached hereto as Attachment C supersede any inconsistent provisions that may be found elsewhere in this Agreement, and such Addendum is incorporated herein by reference. 16. Confidentiality Protected Health Information. General Agent understands and acknowledges that it or an agent may receive from, create or receive on behalf of Company Protected 8

9 Health Information ( PHI ), as defined under the privacy regulations issued pursuant to the Health Insurance Portability and Accountability Act of 1996 ( HIPAA ), and/ or nonpublic personal information, as defined under the Gramm-Leach-Bliley Act and implementing regulations ( GLB ), during the performance of its obligations under this Agreement. Simultaneous herewith, General Agent and Company are entering into a Business Associate Agreement in the form of Attachment D hereto, which is hereby incorporated herein, setting forth the respective obligations of General Agent and Company under HIPAA, the Health Information Technology for Economic and Clinical Health Act of 2009, and the regulations promulgated thereunder Use of Protected Health Information. Except as otherwise specified herein, General Agent may use or disclose PHI received from, created or received on behalf of Company and non-public personal information received from, created or received on behalf of Company to perform functions, activities, or services for, or on behalf or, Company as specified in this Agreement, provided that such use or disclosure would not violate the HIPAA privacy regulations, GLB or other federal or state privacy laws applicable to Company, if done by Company. If General Agent wishes to disclose PHI to any third party, General Agent shall first ensure that such third party enters into a Business Associate Agreement with General Agent in the form of Attachment E hereto Proprietary Information. General Agent acknowledges and agrees, and shall require all agents to acknowledge and agree, that all marketing and promotional materials, advertisements, circulars, brochures, and similar material concerning the Medicare Supplement policies, and all rate and benefit schedules, contracts, records, files, manuals, forms, marketing strategies and techniques and other materials and information furnished by Company to General Agent and agents is confidential and proprietary to Company. General Agent also acknowledges and agrees, and shall require that all agents acknowledge and agree, that such materials and information shall be used only in connection with performance under this Agreement and only in the manner provided by this Agreement. General Agent shall not, and shall require and ensure that all agents shall not, use any such materials and information to directly or indirectly compete with Company during the term of this Agreement or at any time thereafter. Upon expiration or termination of this Agreement, General Agent shall, and shall require and ensure that all agents shall, return such Company information to Company. 17. Signatory Authority. Each party represents and warrants that each of the officers executing this Agreement is duly authorized to do so and is acting within the scope of his or her authority. 18. Governing Law. This Agreement shall be construed and enforced in accordance with the laws of the state of Arizona and applicable federal law. 19. Amendment. In addition to the provisions of Section 10.5, the parties may mutually agree to amend the terms of this Agreement, and all such amendments shall be in writing and signed by the parties. 9

10 20. Conflict of Interest Disclosure. General Agent represents and warrants that neither General Agent nor any of its agents, affiliates, nor any officers, directors, employees, partners, members, owners or shareholders of General Agent or any affiliate of General Agent is related to, affiliated in any way with, or employs (or otherwise has a compensation interest with) any officer, director or employee of Company. 21. No Physician Ownership. General Agent hereby expressly represents and warrants to Company that no physician, no physician organization, and no member of a physician s immediate family owns or holds an ownership or financial interest in General Agent, including any affiliated or related entity or person, that is not the subject of an exception or safe harbor under applicable law, such as the exception for publicly traded securities under 42 CFR (a). 22. Notice. Any notice required to be given under this Agreement shall be in writing, and shall be deemed delivered when personally delivered or three (3) days after the same is sent by certified mail, postage prepaid as follows: To General Agent: Berwick Insurance Group, LLC 4576 E Camp Lowell Drive Tucson, AZ Facsimile Number: To Company: Blue Cross Blue Shield of Arizona Attn: CEO Facsimile Number: With a copy to: Deanna Salazar, Esq. Senior Vice President/ General Counsel BCBSAZ 8220 N. 23 rd Avenue, Building 1 Phoenix, Arizona Facsimile Number: (602) [signatures appear on the following page] 10

11 Blue Cross Blue Shield of Arizona Berwick Insurance Group, LLC By: Name: Title: Signature Date: By: Name: Title: Signature Date: Federal Tax I.D. No.: 11

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13 6. Payment. I agree to look solely to General Agent for payment for my services performed pursuant to this Addendum, and to hold Company harmless against any claims I may have against General Agent. I understand the Commission BCBSAZ forwards to General Agent for Selling Broker s commission is the amount described below % commission for months 1 through 71 of the Policy; and 2. 5% commission for months 72 and all months thereafter of the Policy for so long as long as the Policy remains in effect with BCBSAZ. The term Selling Broker means an appropriately licensed broker who sells the policy and who at the time the Policy is sold and at all times thereafter, satisfies all terms and requirements of this Attachment A INDIVIDUAL AGENT ADDENDUM. Signed: Date: Individual Agent Name: License No.: Taxpayer ID No.: Social Security No.: Date of Birth: Home Address: Business Address: Business Phone Number: Address: 13

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15 ATTACHMENT B COMPENSATION A. Selling Broker Commissions BCBSAZ will pay General Agent the following commission which General Agent shall pay to the Selling Broker as that term is defined herein for Medicare Supplement policies with original effective dates on and after February 1, 2015 ( Policies ). The term Selling Broker means an appropriately licensed broker who sells the policy and who at the time the Policy is sold and at all times thereafter, satisfies all terms and requirements of Attachment A of this Agreement titled INDIVIDUAL AGENT ADDENDUM % commission for months 1 through 71 of the Policy; and 2. 5% commission for months 72 and all months thereafter of the Policy for so long as the Policy remains in effect with BCBSAZ. B. General Agent Override Commissions BCBSAZ will pay the following override commission to the General Agent for Policies sold by a Selling Agent. The term General Agent means an agent who is contracted with BCBSAZ under a General Agent Agreement for Medicare Supplement. 3% commission for all Policies described in Section (A) herein. 14

16 ATTACHMENT B(i) Responsibilities and Services Provided by General Agent The General Agent (GA) shall: 1. For any lead Company provides to the GA, keep a record of and forward to Company the following: (a) Disposition of each lead, including call dates and results (e.g., appointment/no appointment with reasons and next steps) appointment results including reasons for non-enrollment, current healthcare coverage, and current physician); and (b) Number of leads worked by selling agent and the number of calls conducted by subagent to reach each prospect. 2. Provide subagents with enrollment applications and required marketing materials approved by Company for use with prospects. 3. Ensure proper completion of enrollment documents in accordance with Company and applicable state and federal law and guidelines. 4. Forward or cause to be forwarded complete applications to Company for processing within no more than forty-eight (48) hours of completion by prospect. 5. Act as selling subagents first line of contact with respect to inquiries on Company s Medicare Supplement products and processes and ensure that selling subagents issues are resolved within hours of receipt. 6. Ensure that enrollment applications are complete, accurate and submitted to Company promptly in accordance with Company s rules and applicable laws. 7. Maintain accurate and proper records and accounts of all transactions. 8. Make records and accounts available to Company or its representatives during normal business hours. 9. Compensate subagents for Medicare Supplement sales. 10. Ensure the compensation methodology and the compensation amounts to be paid to subagents comply at all times with any applicable state and federal laws and all applicable Medicare Supplement statutes, rules, regulations, guidance and any other applicable state and federal laws and regulations. 11. Disclose to Company upon Company s request at any time the compensation structure and amounts payable or paid to subagents. 12. Ensure all sales, marketing, and service activities involving Company or any of the Company s products managed by GA strictly adhere to the Company s administrative guidelines as well as any other rules communicated by Company to GA. 13. Ensure all subagents have executed the Individual Agent Addendum (Attachment A to this Agreement) prior to selling Company s Medicare Supplement policies. 15

17 14. Ensure all subagents participate in training sessions, which include review of training materials provided by Company. 15. Ensure that all subagents are trained annually by Company to sell Company s Medicare Supplement policies and/or to receive and/or continue receiving renewal commission payments. 16. Provide subagents with marketing materials approved by Company for the training program and monitor and certify to Company ongoing compliance by subagents with the requirements and principles stated in the training program. 17. Comply with and ensure subagents comply with all applicable state and federal laws regarding marketing of Medicare Supplement policies. 18. Ensure subagents use only Company materials that have been approved by Company as in compliance with applicable laws. 19. Refrain from collecting and ensure subagents refrain from collecting under any circumstance any premium, fee or payment from individual prospects in connection with the coverage quoted for a Company Medicare Supplement policy. 20. Maintain records of all activities performed in accordance with this Agreement including evidence of state licensure in effect for GA and all subagents, training, statistical performance and performance evaluations. 21. Provide Company with information and data necessary for Company to meet any reporting obligations under any Company contracts. 22. Maintain and provide a defined subagent recruitment and screening process to ensure Medicare Supplement subagents are actively selling Company s Medicare Supplement policies in a compliant and ethical manner. 23. Routinely communicate with subagents about Company s Medicare Supplement policies, processes and services. 24. Ensure all subagents fully comply with any applicable state and federal laws and guidelines related to Medicare Supplement policies. 25. Establish a disciplinary process for subagents who violate applicable state and federal laws or guidelines which process includes steps that lead to a subagent s termination. 26. Provide Company with monthly status reports that recap all GA oversight activities performed during the preceding month. 27. Implement a focused marketing strategy under which GA will actively promote and market BCBSAZ Medicare Supplement policies for Company which shall comply with any applicable state and federal law and/or guidelines. 28. Provide a list of all planned community marketing and sales events in which the GA and/or subagents will participate. 29. Notify Company of any changes to the list of events within 48 hours or as soon as they are notified of the change. 16

18 30. Ensure all subagents promote to each prospective member only those products in which prospective member is eligible to enroll and which the GA and subagents in good faith believe meet the needs of the prospective member. 31. Use best efforts to supervise subagents and have standards in place to reasonably assure its subagents are in compliance with the terms of their contracts. 32. Follow, be governed, and take appropriate steps to require subagents to follow and be governed by the terms and conditions in the policies, procedures, rules and regulations of state and federal laws and Company guidelines. 33. Use best efforts to keep Members enrolled in the appropriate products by providing prompt service to Members and subagents. 34. Comply with and meet the performance requirements which Company may establish from time to time and acknowledge and agree that failure to comply with and meet such performance requirements may result in termination of the agreement. 35. Actively supervise all subagents, and monitor and assume responsibility for the conduct, acts and performance of each subagent. 36. Take all necessary steps to communicate to subagents Company s requirements for the marketing and promotion of its Medicare Supplement products. 17

19 ATTACHMENT C State and Federal Law ADDENDUM General Agent shall comply, and shall ensure that all agents comply with all applicable Medicare Supplement laws and regulations. General Agent shall perform, and shall ensure that all agents perform the services set forth in the Agreement in a manner consistent with and in compliance this Agreement and with any Company contract(s). For the purpose of conducting audit, evaluation or inspection activities, General Agent shall make available and shall ensure that agents shall, make available its or their premises, physical facilities and equipment, records relating to the services provided under the Agreement, and any additional relevant information that Company or its designees may require. General Agent shall ensure that its agents shall abide by all applicable federal and state laws regarding maintenance, confidentiality and disclosure of records and information including, without limitation, the requirements established by Company and state and federal law, as applicable. Company may amend this Addendum to comply with the requirements of any state and federal regulatory authorities, and shall give written notice to General Agent of such amendment and its effective date. Unless such regulatory authorities direct otherwise, the signature of General Agent will not be required. 18

20 ATTACHMENT D BUSINESS ASSOCIATE ADDENDUM ADDENDUM TO AGREEMENT WITH BUSINESS ASSOCIATE This Addendum to Agreement with Business Associate ( Addendum ) amends and is made part of that certain General Agent Agreement ( Agreement ), by and between [INSERT NAME OF GENERAL AGENT] ( Business Associate ), and Blue Cross and Blue Shield of Arizona, Inc., an Arizona nonprofit corporation and an independent licensee of the Blue Cross and Blue Shield Association ( Company ). Company and Business Associate mutually agree to modify the Agreement to incorporate the terms of this Addendum to comply with the requirements of the Health Insurance Portability and Accountability Act of 1996 and its implementing regulations, including the changes mandated by the Health Information Technology for Economics and Clinical Health Act ( HIPAA and HITECH Act respectively). Any capitalized term used, but not defined, in this Addendum shall have the meaning set forth in the HIPAA Rules. The HIPAA Rules include the Privacy, Security, Breach Notification, and Enforcement Rules at 45 CFR Part 160 and Part 164. The HIPAA Privacy Rule is at 45 CFR, part 160 and part 164, subparts A and E. The HIPAA Security Rule is at 45 C.F.R. Parts 160 and 164. The HIPAA Breach Notification Rule is at 45 CFR Part 164 Subpart D. A. Privacy of Protected Health Information. 1. Permitted Uses and Disclosures. Business Associate is permitted to use or disclose Protected Health Information ( PHI ) it creates or receives for or from Company or to request PHI on Company s behalf only as follows: a) Functions and Activities on Company s Behalf. Business Associate is permitted to use and disclose PHI in connection with the performance of services to Company and on Company s behalf, and to perform the services specified in the Agreement. Business Associate s use, disclosure or request of Protected Health Information shall utilize a Limited Data Set if practicable. Otherwise, Business Associate will, in its performance of these services, make reasonable efforts to use, to disclose, and to request of a Covered Entity only the minimum amount of Company s Protected Health Information reasonably necessary to accomplish the intended purpose of the use, disclosure or request. In addition, Business Associate agrees to implement and follow appropriate minimum necessary policies in the performance of its obligations under the Agreement and any other Agreement(s) entered by the parties. b) Business Associate s Operations. Business Associate may use the Minimum Necessary PHI it creates or receives for or from Company for Business Associate s proper management and administration or to carry out Business Associate s legal responsibilities. Business Associate may disclose the Minimum Necessary of such PHI for Business Associate s proper management and administration or to carry out Business Associate s legal responsibilities only if: (i) The disclosure is Required by Law; or 19

21 (ii) Business Associate obtains reasonable assurance, evidenced by written contract, from any person or organization to which Business Associate will disclose such PHI that the person or organization will: a. Hold such PHI in confidence 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. Within five (5) days, notify Business Associate (who will in turn promptly notify Company) of any instance of which the person or organization becomes aware in which the confidentiality of such PHI was breached. 2. Incorporation of Privacy Provisions. Business Associate acknowledges and agrees that it shall comply with the provisions set forth in 45 C.F.R (e), which is incorporated herein by reference, as well as any additional obligations defined in the Agreement. 3. Prohibition on Unauthorized Use or Disclosure. Business Associate will neither use nor disclose PHI it creates or receives for or from Company or from another business associate of Company, except as permitted by this Addendum. Without limiting the foregoing, Business Associate acknowledges and agrees that it shall not use or disclose any PHI for purposes of Marketing. Additionally, absent Company s prior written consent, Business Associate shall not disclose PHI outside the United States. 4. Sale of PHI. Business Associate shall not directly or indirectly receive remuneration in exchange for PHI, unless such remuneration is permitted by a contract between Business Associate and Company and is consistent with applicable law. 5. Data Aggregation and De-Identification. Business Associate shall not de-identify any PHI received from or created on behalf of Company unless explicitly and specifically permitted by the Agreement or otherwise in writing by Company. Business Associate shall not engage in data aggregation activities unless explicitly and specifically permitted by the Agreement or otherwise in writing by Company and consistent with applicable law. B. Security of Protected Health Information. Business Associate will develop, implement, maintain, and use appropriate administrative, technical, and physical safeguards ( Safeguards ) to protect the privacy of Company s Protected Health Information. The safeguards must reasonably protect Company s Protected Health Information from any intentional or unintentional use or disclosure in violation of the Privacy Rule, 45 C.F.R. Part 164, Subpart E and this Addendum, and limit incidental uses or disclosures made pursuant to a use or disclosure otherwise permitted by this Addendum. 20

22 1. Safeguards for Securing Electronic PHI. a) Business Associate will maintain and use appropriate administrative, technical, and physical safeguards, in compliance with the HIPAA Security Rule, standard business practices, any other applicable regulations governing privacy and security and/or any instructions or guidelines issued by Company that are provided, to preserve the integrity, availability and confidentiality of, and to prevent non-permitted or violating use or disclosure of, Electronic PHI created or received for or from Company. Additionally, Business Associate shall develop and implement policies and procedures to meet the HIPAA Security Rule documentation requirements. b) Business Associate will document and keep these Safeguards current and shall notify Company of all significant changes to such Safeguards. These Safeguards shall extend to transmission, processing, and storage of Electronic PHI. Transmission of Electronic PHI shall include transportation of storage media, such as magnetic tape, disks or compact disk media, from one location to another. C. Agents and Subcontractors. Business Associate will require its agents and subcontractors to which Business Associate discloses PHI created or received by Business Associate for or from Company to provide reasonable assurance, evidenced by written contract, that, with respect to such PHI, such agents or subcontractors will comply with the same privacy and security requirements with which Business Associate is required to comply and will not further disclose such PHI. D. PHI Access, Amendment and Disclosure Accounting. 1. Access. Business Associate will, within seven (7) days after Company s request, make available to Company for inspection and obtaining copies any PHI about the individual that Business Associate created or received for or from Company and maintains in a Designated Record Set so that Company may meet its access obligations under 45 C.F.R Business Associate shall make such information available in an electronic format upon Company s request. 2. Amendment. Business Associate will, within seven (7) days after Company s request, promptly amend any portion of the PHI that Business Associate created or received for or from Company and maintains in a Designated Record Set, so that Company may meet its amendment obligations under 45 C.F.R Disclosure Accounting. So that Company may meet its disclosure accounting obligations under 45 C.F.R : a) Disclosure Tracking. For each disclosure which Business Associate makes of PHI that it creates or receives for or from Company and which is subject to the disclosure accounting requirements of the HIPAA Privacy Rule, Business Associate will record the following: (i) the disclosure date, (ii) the name, date of birth, gender, Company ID number (including prefix) and (if known) address of the person or entity to whom Business Associate made the disclosure, (iii) a brief description of the PHI disclosed, (iv) a brief statement of the purpose of the disclosure, and (v) additional information as may be required by applicable law (items i-v, collectively, the disclosure information ). For repetitive disclosures Business Associate makes to the same person or entity (including Company) for a single purpose, Business Associate may provide (x) the disclosure information for the first of these repetitive disclosures, (y) the frequency, periodicity or number of these repetitive disclosures, and (z) the date of the last of these repetitive disclosures. Business Associate will 21

23 make this disclosure information available to Company within seven (7) days after Company s request. b) Disclosure Tracking Time Periods. With respect to the disclosure tracking required by Paragraph D.3(a), Business Associate must have the disclosure information available for the 6 years preceding Company s request. 4. Inspection of Books and Records. Business Associate will make its internal practices, books, and records, relating to its use and disclosure of the PHI it creates or receives for or from Company, available to Company and to the U.S. Department of Health and Human Services to determine compliance with the HIPAA Rules or this Addendum. E. Requests for Privacy Protection. Company will notify Business Associate of any requests for privacy protection for PHI which Company receives in accordance with 45 C.F.R and agrees to which will impact Business Associate s uses and disclosures of PHI. Business Associate agrees to comply with all such restrictions about which it receives notice from Company. F. Breach of Obligations. 1. Reporting. Business Associate will report to Company any Security Incident affecting Company s PHI, Breach or other use or disclosure of PHI not permitted by this Addendum (collectively, Unauthorized Event ). This obligation to report a Breach shall include any unauthorized acquisition, access, use, or disclosure, even where Business Associate has determined that such unauthorized acquisition, access, use, or disclosure does not compromise the security or privacy of such information, unless such acquisition, access, use or disclosure is excluded from the definition of breach in 45 C.F.R Where Business Associate has determined that there has been no compromise of such information, it also shall provide to Company any risk assessment performed in connection with its determination. Business Associate will make the report to Company s Privacy Office within five (5) days after Business Associate learns of the Unauthorized Event and will include in such report at least: a) The identity of each individual whose PHI was subject to the Unauthorized Event; b) Identify the nature of the Unauthorized Event; c) Identify the PHI involved in the Unauthorized Event; d) Identify who used or received PHI as a result of the Unauthorized Event; e) Identify what corrective action Business Associate took or will take to prevent further events similar to the Unauthorized Event; f) Identify what Business Associate did or will do to mitigate any deleterious effect of the Unauthorized Event; g) Provide the date of the Unauthorized Event, including a written report, as Company may reasonably request; h) Identify whether the PHI subject to the Unauthorized Event was Unsecured; and i) Provide such other information, including a written report, as Company may reasonably request. 2. Mitigation. In the event of any Unauthorized Event, Business Associate agrees to use its best efforts to promptly cure such event and mitigate any harmful effects therefrom. If, as a result of any Unauthorized Event, Company determines, in its own discretion, that it is appropriate to provide credit monitoring or deems the provision of credit monitoring to be reasonable and appropriate given the nature of the event, Business Associate agrees 22

24 to pay for the costs of the credit monitoring for affected individuals. Similarly, if as a result of any Unauthorized Event, Company is required by applicable law or contractual obligations to notify impacted individuals, or otherwise deems such notification appropriate in Company s discretion, Business Associate agrees to reimburse Company s reasonable costs associated with such notifications or, at Company s election, provide the notification directly. 3. Termination of Agreement. a) Company s Right to Terminate for Breach. In addition to all other remedies available at law or in equity, Company may terminate any agreement or relationship Company has with Business Associate if it determines, in its sole discretion, that Business Associate has breached any provision of this Addendum. Company may exercise this right to terminate by providing Business Associate written notice of termination and stating the breach of the Addendum that provides the basis for the termination. Any such termination will be effective immediately or at such other date specified in Company s notice of termination. If for any reason Company determines that Business Associate has breached the terms of this Addendum and such breach has not been cured, but Company determines that termination of an agreement or relationship with Business Associate is not feasible, Company may report such breach to the U.S. Department of Health and Human Services. b) Obligations upon Termination. (i) Return or Destruction. Upon termination, expiration or other conclusion of the agreements and relationship between Company and Business Associate, Business Associate will, if feasible, return to Company or destroy all PHI, in whatever form or medium (including in any electronic medium under Business Associate s custody or control), that Business Associate created or received for or from Company, including all copies of and any data or compilations derived from and allowing identification of any individual who is a subject of the PHI. Business Associate will complete such return or destruction as promptly as possible, but not later than twenty (20) days after the effective date of the termination, expiration or other conclusion of the Agreement. If such return or destruction of records is not feasible, Business Associate will notify Company of any PHI for which return or destruction is not feasible. For all such PHI where Company agrees that such return or destruction is infeasible, Business Associate will limit its further use or disclosure of that PHI to those purposes that make return or destruction of that PHI infeasible. Within twenty (20) days after the effective date of the termination, cancellation, expiration or other conclusion of the agreements and relationship between company and Business Associate, Business Associate will certify on oath in writing to Company that such return or destruction has been completed, and will deliver to Company the identification of any PHI for which return or destruction is infeasible and, for that PHI, will certify that it will only use or disclose such PHI for those purposes that make return or destruction infeasible. (ii) Continuing Obligations. Business Associate s indemnification and mitigation obligations and obligation to protect the privacy and security of the PHI it created, received, maintained or transmitted for or from Company will be continuous and 23