Agreement for Insurance Brokerage Services Agreement made this 17 th day of April 2014 between Washington State Transit Insurance Pool (referred to as WSTIP) 2629 12 th Court SW Olympia, WA 98502 (360) 786-1620 Contact Person: Allen F. Hatten al@wstip.org (referred to as Alliant) 1301 Dove Street, Suite 200 Newport Beach, CA 92660 Contact Person(s): Lilian Vanvieldt lvanvieldt@alliant.com Brian White brian@alliant.com WHEREAS, the Washington State Transit Insurance Pool ( Pool ) desires to engage a skilled insurance broker in order to secure insurance and risk financing services for its members; and WHEREAS, ( Alliant ) through its public entity division is a skilled insurance broker emphasizing public entity insurance pools; NOW, THEREFORE, in consideration of the mutual covenants contained herein, it is hereby agreed as follows: Section 1. Broker of Record. The Pool designates Alliant as its insurance broker of record. Section 2. Mandate. a. Alliant shall use its best efforts and shall collaborate with the Pool in the development, marketing, and monitoring of risk management and risk financing programs which afford the best protection to the Pool s members at the lowest, reasonable price. b. Notwithstanding that this agreement specifies various duties and obligations that Alliant must fulfill, the Pool anticipates that Alliant will lead the Pool into innovative programs to the benefit of the Pool s members. Section 3. Categories of Risk. Alliant shall provide services relating to excess and reinsurance for the following categories of risk: a. General liability; b. Auto liability; c. Auto physical damage; d. Property; e. Boiler and machinery; f. Inland marine; g. Crime coverage; and Washington State Transit Insurance Pool Page 1 of 6
h. Public officials liability; i. Employment practices liability; j. Pollution liability and underground storage tank coverage; k. Excess workers compensation; l. Special events coverage; and m. Other categories of risk as may be agreed upon by the parties. Section 4. Scope of Services. The scope of services shall include: a. Insurance Coverage. Obtain as requested insurance, reinsurance, and excess insurance for the categories of risk set forth in Section 3 which afford the best feasible protection at the lowest reasonable price. b. Program Evaluation. On an on-going basis Alliant shall evaluate the risk management and risk financing programs and shall make recommendations for improvement as it deems appropriate. At least once per year Alliant shall produce a comprehensive written evaluation and shall present the evaluation at the Pool s first quarterly meeting. c. Policy Maintenance. This shall include (1) Issuing policies, binders, endorsements, and certificates of insurance; and (2) Transmitting invoices. d. Coverage Analysis. Provide coverage analysis upon request. e. Claims Management. Provide assistance with the management of claims upon request. f. Marketing. This shall include: (1) At least five months prior to renewal, in collaboration with the Pool, develop a marketing strategy for placement of commercial insurance; (2) Gather underwriting information; (3) Review and format underwriting information for submission; (4) Evaluate indications and proposals received from underwriters, and (5) Make written recommendations on coverage to Pool. g. Help to Members. Upon request provide assistance to the Pool s members upon their individual insurance needs which are outside the scope of the coverages provided by the Pool. h. Reports to Management. As further described in Section 5, make written reports and in person presentations to the Pool s board of directors at each of the four quarterly board meetings. The reports shall include a summary and evaluation of the Pool s insurance and reinsurance programs. i. Marketing Individual Members. Upon request Alliant shall market the insurance coverage of an individual member of the Pool in order to compare such coverage with the coverage available through the Pool. Alliant shall not be obligated to market more than two individual members each year. j. Marketing Assistance. Assist the Pool in marketing products to its members or potential members. This may include onsite visits. and Washington State Transit Insurance Pool Page 2 of 6
k. Board Training. Provide 30 minutes quarterly training to the Board on the elements of insurance with the goal of providing newer members a foundational understanding of the WSTIP insurance program. Section 5. Periodic Deliverables. The periodic deliverables shall include: a. A summary of the status of all policies; b. A marketing report, including future projections, that characterizes the insurance marketplace with an emphasis on transit risk; c. Alliant s accomplishments for the last twelve months and work planned for the upcoming twelve months. This shall include the general renewal process, strategies and strategic developments in the insurance industry, and developments in public entity pooling; and d. An evaluation of market trends, possible coverage expansions or retractions, alternative deductibles or self-insured retentions, and alternative limits. Section 6. Pool Data and Information. As requested by Alliant, the Pool shall provide loss and claims data and other information to enable Alliant to understand the Pool and its members and to market its insurance. Section 7. Terms. a. This agreement shall be in effect from. b. The Pool may renew this agreement for additional one year terms by giving Alliant written notice thereof at least sixty days prior to the expiration of the agreement. Section 8. Compensation. a. The Pool shall compensate Alliant $101,200 annual with the total compensation for the 5-year term not to exceed $506,000. b. Compensation shall be paid quarterly in equal installments. c. In the event the work required by Alliant to fulfill the obligations of this agreement is materially increased as a consequence of the addition of new members to the Pool, the parties shall negotiate an increase in Alliant s compensation. Section 9. Other Alliant Services. a. Alliant Specialty Insurance Services (ASIS). In addition to the compensation that Alliant receives, its related entity, Alliant Specialty Insurance Services (ASIS) and its underwriting operations, Alliant Underwriting Services (AUS), may receive compensation from Alliant and/or carriers for providing underwriting services. The financial impact of the compensation received by ASIS is a cost included in the premium. WSTIP further acknowledges that Alliant and ASIS maintain an arm s length relationship. WSTIP understands that while Alliant represents WSTIP as an individual entity, ASIS independently administers its program as whole and not on behalf of any particular member. and Washington State Transit Insurance Pool Page 3 of 6
b. Alliant Business Services (ABS); Strategic HR. Additionally, Aliant s internal operating groups, Alliant Business Services (ABS) and/or Strategic HR, may receive compensation from Alliant and/or carriers for providing designated, value-added services. Services contracted for by WSTIP directly will be invoiced accordingly. Otherwise, services will be provided at the expense of Alliant and/or the carrier. c. Third Party Brokers and Indirect Income. (1) Third Party Brokers. Alliant may determine from time to time that it is necessary or appropriate to utilize the services of third party brokers (such as surplus lines brokers, underwriting managers, London market brokers, and reinsurance brokers) to assist in marketing the WSTIP insurance program. Subject to the provisions herein, these third party brokers may be affiliates of Alliant (e.g., other companies of Alliant that provide services other than those included within the scope of work services required of the contract, or may be unrelated third party brokers. Compensation to such third party brokers will not be part of Alliant s fee. (2) Indirect Income means insurance carrier contingency arrangements, Alliant will not accept these compensation incentives from insurers, including contingent commissions, market service agreements (MSA), volume-based commissions, incentives and rebates on business placed on behalf of WSTIP within the scope of work services required. Section 9. Commissions. a. Alliant shall receive no remuneration pursuant to this agreement other than as specified in Section 8; provided, Alliant may receive (1) Pollution and underground storage tank coverage; (2) Special events coverage; (3) Excess workers compensation; (4) Owner controlled insurance program; and (5) Notary and public officials bonds. b. In the event Alliant receives a commission for policy placement, other than those listed in 9a, Alliant shall promptly so notify the Pool. The commission shall offset amounts otherwise due Alliant pursuant to Section 8 or, if no amount is due pursuant to section 8, the amount of the commission shall be refunded to the Pool. This subsection shall not apply to additional compensation allowed by Section 9 & 8. Section 10. Hold Harmless. a. Alliant shall hold harmless and defend Pool, its agents, officers, and employees, at all times against claims, costs, expenses, liability, obligation, loss or damage (including reasonable attorneys fees) of any nature, based upon any errors or omissions of Alliant, its agents, officers, or employees, with respect to the services provided by Alliant under this agreement. b. Pool shall hold harmless and defend Alliant, its officers and employees, at all times against any claims, costs, expenses, liability, obligation, loss or damages (including reasonable attorneys and Washington State Transit Insurance Pool Page 4 of 6
fees) of any nature, based upon any errors or omissions of Pool, its agents, officers and employees, with respect to obligations of Pool under this agreement. Section 11. Insurance. a. Alliant shall maintain a professional liability insurance with limits no less than $5,000,0000,000. b. Upon request Alliant shall provide the Pool with a certificate evidencing such insurance. Section 12. Termination. a. The Pool may terminate this agreement without cause by providing Alliant sixty days written notice. b. Except as provided by subsection c, Alliant may terminate this contract only at the end of a calendar year by providing written notice to the ninety days prior to the end of the contract year. c. The Pool or Alliant may terminate this contract for material breach of contract by providing written notice thereof which specifies in detail the nature of the breach and what measures it believes are necessary to cure the breach; Provided, if either the Pool or Alliant seeks to terminate for material breach, the alleged breaching party shall have thirty days in which to cure the breach and, if cured, the agreement shall continue in full force and effect. Section13. Ownership of Records. a. All books, records, lists of names, journals, ledgers and other information developed in connection with this agreement shall always be and remain the property of the Pool. b. Alliant shall keep all such material confidential and shall not reproduce, disclose or disseminate the material or information contained therein to third parties without the prior written consent of the Pool. Upon termination of this Agreement for any reason, Alliant shall immediately return all such material, and any copies thereof, to the Pool; Provided, Alliant may retain materials if so required by law. Section 14. Governing Law. The laws of the State of Washington hall apply to the interpretation and enforcement of this agreement; Provided, Washington rules with regard to conflict of laws shall not apply, and, therefore, Washington substantive law will apply to the interpretation and enforcement of this agreement in every respect. Section 15. Venue. Venue for any action to enforce or interpret this agreement shall be laid in the Thurston County Superior Court for the State of Washington or the United States District Court for te Western District of Washington. Section 16. Attorneys Fees. The prevailing party in any action to enforce or interpret this agreement shall be entitled to its costs and reasonable attorneys fees. Section 17. No Assignment. This agreement may not be transferred or assigned by one party without the written consent of the other. and Washington State Transit Insurance Pool Page 5 of 6
Section 18. Conflicts of Interest. In the event any conflict of interest or apparent conflict of interest arises between Alliant and the Pool, Alliant shall immediately notify the Pool in writing. The parties shall use their best efforts to resolve any conflict or apparent conflict. Section 19. Personnel Assigned. a. The following Alliant personnel shall be primarily responsible for fulfilling the requirements of this agreement: (1) Lillian Vanvieldt; (2) Brian White; and (3) Gordon DesCombes b. Alliant may not change the personnel primarily responsible for this agreement without first obtaining the Pool s consent on replacements. Such consent shall not be unreasonably withheld. Section 20. Non-Solicitation. Alliant agrees that for 24 months upon termination of agreement, Alliant shall not, without WSTIP s written consent, solicit business from WSTIP members for the lines of business which the Washington State Transit Insurance Pool currently offers. DATED this day of April, 2014 Lillian Vanvieldt, Senior Vice President Alliant Insurance Services DATED this day of April, 2014 Allen F. Hatten, Executive Director Washington State Transit Insurance Pool and Washington State Transit Insurance Pool Page 6 of 6