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HomeMy WebLinkAboutResolution - 4593 - Contract - Crawford & Company - Claims Servicing - 08_25_1994Resolution No. 4593 Item #39 August 25, 1994 RESOLUTION BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF LUBBOCK: THAT the Mayor of the City of Lubbock BE and is hereby authorized and directed to execute for and on behalf of the City of Lubbock a Contract and all related documents by and between the City of Lubbock and Crawford and Company for a Claims Servicing Contract with the City of Lubbock, which contract is attached hereto, which shall be spread upon the minutes of the Council and as spread upon the minutes of this Council shall constitute and be a part of this Resolution as if fully copied herein in detail. Passed by the City Council this 25th day of August 1994. ATTEST: Betty A Johnso City Secretary APPROVED AS TO CONTENT: Robert Massengale, Assistant City Manager APPROVED AS TO FORM: Wald andiver, First Assistant City Attorney DGV:c4AG: codocs\CrawfordRo July 19, 1994 Resolution No. 4593 CRAWFORD & COMPANY Item #39 CLAIM SERVICE CONTRACT August 25, 1994 THIS AGREEMENT, made and entered into effective this twenty-fifth day of August, 1994, between CRAWFORD & COMPANY, a corporation of the State of Georgia, hereinafter referred to as the "Servicing Company," and CITY OF LUBBOCK, a governmental entity of the State of Texas, hereinafter referred to as "Client." WTTNESSETH THAT WHEREAS, the "Servicing Company" operates a business known as CRAWFORD & COMPANY, Claims Adjusters, and WHEREAS, The "Client" desires to employ the "Servicing Company" as its Claims Adjusters, to service its claims for its self -insured exposures as stated in Paragraph (3) hereunder, up to its self -insured retention. NOW THEREFORE, the "Servicing Company" and the "Client" mutually agree as follows: (1) The general agreement pages, to which this is attached, are made a part hereof as though fully repeated and set out herein. (2) This contract covers Claim Service for the "Client" in the U.S.A. (3) The "Client" shall pay the "Servicing Company" fees as follows: 180 State Workers' Compensation Medical Only claims @ $68.00 per claimant = $ 12,240.00 100 State Workers' Compensation Indemnity claims @ $655.00 per claimant = $ 65,500.00 37 Automobile Liability claims @ $240.00 per claimant = $ 8,880.00 209 General Liability claims @ $240.00 per claimant = $ 50,160.00 $136.780.00 The "Client" agrees to pay the "Servicing Company" at the rate of one -twelfth (1/12) of $136,780.00 per month ($11,398.33). At the first of each monthly period during the term of this contract, monthly billings in said amount will be submitted to the "Client" by the "Servicing Company" and such billings will be paid by the "Client" to the "Servicing Company" within forty-five days of such billing. Twelve months after the contract term, there shall be a final accounting as to the actual number of claimants handled by the "Servicing Company" and the "Servicing Company" will be entitled to compensation at the above flat rates for each claimant in excess of the above numbers. Likewise, the "Client" shall be entitled 9E to a refund on the Sdme basis if the number of claimants does not reach the above projections. If the final accounting results in a refund duce the "Client," the "Servicing Company" will make such refund within ninety (90) days of the "Client's" written request for such refund. If the final accounting results in the "Client" owing the "Servicing Company" additional sums, the "Client" will pay the "Servicing Company" within ninety (90) days from the date of the "Servicing Company's" billing for such additional sums. Any single accident or occurrence resulting in ten or more declared or potential claimants shall be treated as a catastrophe. Such catastrophe cases shall be handled on a Time and Expense basis by the "Servicing Company" at its then prevailing hourly rate and expense method of billing. Contractual Liability claims, Personal Injury Liability claims, Employer's Liability claims, Occtipational Disease claims, and subrogation investigation shall be handled on a Time and Expense basis by the "Servicing Company" at its then prevailing hourly rate and expense method of billing. All claim services in Puerto Rico and the Virgin Islands shall be provided by the "Servicing Company" on a Time and Expense basis at its then prevailing hourly rate and expense method of billing. Billings for time and expense claims will be submitted to the "Client" by the "Servicing Company" when such claims are concluded, or if any such claims have not been concluded and have accumulated billing amounts of Two Hundred Dollars ($200) or more, the "Servicing Company" will submit interim time and expense billings to the "Client" within six (6) months from the date of assignment of such claims to the "Servicing Company." Subsequent interim billings will be submitted thereafter only when any such claim has ,accumulated a billing amount of Two Hundred Dollars ($200) or more. Claims so interim billed shall continue to be handled by the "Servicing Company" after interim billing on a time and expense basis at the "Servicing Company's" then prevailing hourly rate and expense method of billing. Such time and expense billings submitted to the "Client" by the "Servicing Company" will be paid by the "Client" to the "Servicing Company" within thirty (30) days of billing. For all Time and Expense lines of coverage, SISDAT shall be charged on the basis of $15 per claimant which shall be reconciled by the "Servicing Company" in the same manner ns stated above. In addition to the compensation of the "Servicing Company" set forth herein, any taxes, except taxes on income, which the "Servicing Company" may be required to pay or collect or which may be incurred by or assessed against the "Servicing Company," under any existing or future law, in any way relating to the sale, delivery, rendering or provision of services to Lite "Client" pursuant to this contract, including but not limited to any Canadian (Federal, Provincial, territorial or local) or any domestic (Federal, State or local) sales, use, personal property, ad valorem or other tax shall be for the account of the "Client." The "Servicing Company" shall bill the "Client" and the "Client" shall promptly pay the "Servicing Company" all such taxes in accordance with the provisions of the applicable law and regulations concerning collection of such taxes and the "Servicing Company" shall remit such taxes to the appropriate taxing authority. The fees of the "Servicing Company" apply only to claims handling within the "Client's" self-insurance retention. Once the "Client's" -2- self-insurance retention(s), either specific or annual aggregate, has/have been nxceeded, the "Servicing Company" will be considered to have earned its fee(s) As seL forth under this contract. GENERAL AGREEMENTS 1. TIfE "SERVICING COMPANY" AGREES: A. To review all claim and/or loss reports with claim and/or loss dates incurred during the term of this contract for all accident/occurrence lines of exposure or claims and/or losses made during the term of this contract for all claims made lines of exposure, involving the hereinabove stated exposures to the "Client." B. To investigate, with reasonable diligence, all reported claims and/or losses As defined in Section I.A., above. C. To investigate, adjust, settle or resist all such losses and/or claims as defined in Section I.A., within the discretionary settlement authority limit of the "Servicing Company." The settlement authority of the 'Servicing CogwrV' shall be described in exhibit 'W'. D. To investigate, adjust, settle or resist all such losses and/or claims as defined in Section I.A., in excess of the discretionary settlement authority limit of the "Servicing Company" with specific prior Approval of the. "Client." E. To furnish all claim forms necessary for proper claims Administration. F. To establish claim and/or loss files for each reported claim and/or loss. (Claim and/or loss files are subject to review by the "Client" at any reasonable time, without prior notice.) G. That the records, reports and other information created, gathered, or maintained by "Servicing Company" in discharging its obligations to City under this agreement may well be considered public records and accordingly such public records may not be destroyed (V.A.P.C. Sec. 37.10). "Servicing Company' Agrees to care for and return all of its records maintained by it in the discharge of this contract to City for proper storage. The policy described in Exhibit "A" shall be followed by "Servicing Company' as to when a record, report or other information shall he returned to City. H. To furnish the "Client" with monthly Loss Run, monthly Loss Fund Activity and gnArterly Loss Cause Analysis claim statistical information from the "Servicing Company's" SISDAT Department. The "Client" shall designate the breaks for the total and subtotals for each division, region, etc. In the event the "Client" desires a statistical report of its own design, or additional reports from SISDAT, a separate quotation for the additional cost will be submitted to the "Client" for approval. The statistical information will be ftirnished to the "Client" either as hard copy or microfiche. -3_ Exhibit A Exhibit B J. To maintain adequate General Liability, Automobile Liability, Workers Compensation, Fidelity Bond, and Errors and Omissions insurance coverage. J. To establish an account (regular demand deposit account or minimum balance controlled disbursement account), hereinafter referred to as the "Loss Fund Account," with a bank in Atlanta, Georgia of the choice of the "Servicing Company" for the purpose of paying claims and/or losses and associated allocated loss expense and to maintain and perform monthly reconciliations of that account. The cost of any bank charges shall be paid by the "Client." K. To indemnify, defend, and hold harmless the "Client" with respect to any claims asserted as a result of any errors, omissions, torts, intentional torts or other negligence on the part of the "Servicing Company" and/or its employees unless the complained of actions of the "Servicing Company" were taken at the specific direction of the "Client." L. To report directly to the "Client" and to have no responsibility for reporting to or placing any specific excess insurer(s) or annual aggregate excess insurer(s) on notice of any claim(s) that is/are or may be required to be reported or notice given to Bitch excess insurer(s) under any such excess insurance policies available to the "Client." The "Servicing Company" will continue to handle claims once the "Client's" self-insurance retention, either specific or annual aggregate, has been exceeded if mutually agreed to by the "Client" and excess insurer(s), if there is no controversy as to coverage, liability, and damages between the "Client" and its excess insurer(s). Such further claims handling will be provided by the "Servicing Company" at time and expense based upon its then prevailing hourly rate and expense method of billing with the excess insurer(s) being responsible for supervision of the "Servicing Company" and payment of the "Servicing Company's" time and expense service hills. M. That its wholly owned subsidiary, Risk Sciences Group, Inc., will provide the services set forth in Exhibit B, attached hereto and made a part hereof, for the consideration and in accordance with the terms and conditions of the agreement therein set forth. II. TIFF "VT,TFNT" AGRFF.S: A. To make funds available that the "Servicing Company" may draw from at any time and from time to time for claim and/or loss payments and for associated allocated expense within the discretionary settlement authority limit of the "Servicing Company" and for claim and/or loss payments in excess of the discretionary settlement authority limit of the "Servicing Company." (1) On or before the effective date of this contract, the "Client" will provide an initial imprest deposit to the "Servicing Company" in an amount equivalent to five -4- (5) banking days of average anticipated claim and/or loss and associated allocated expense payments or ten thousand dollars ($10,000), whichever is greater, to be maintained by the "Servicing Company" as a loss fund deposit, hereinafter referred to as the "Deposit," for payment of claims and/or losses and associated allocated expense from the "Servicing Company's" "Loss Fund Account." (2) Reimbursement to the "Loss Fund Account" will be made by a daily direct debit executed by the "Servicing Company's" bank against the "Client's" designated bank account for deposit into the "Loss Fund Account" at the "Servicing Company's" bank. The amount of the daily direct debit will be limited to the amount computed by the "Servicing Company" who will instruct its bank as to the appropriate amount. The amount of the daily direct debit will be determined by the "Servicing Company" computing the average claim and/or loss and associated allocated expense payments made daily for the "Client." Each day the same average amount will be deposited into the "Servicing Company's" "Loss Fund Account" via a direct debit drawn against the "Client's" designated bank account. At the end of each month, beginning with the end of the first month from the effective date of this contract, the "Servicing Company" will compare the total deposits to the "Loss Fund Account," including all direct debits resulting from the average daily budgeted amount and any amount as specified in Section II.A.(4) below, made during the month to the "Servicing Company's" "Loss Fund Account" to the actual claim payment account detailed in the SISDAT Monthly Loss Fund Activity and Loss Run Reports and an adjustment direct debit will be made, so the monthly deposits are equal to the totals shown on such SISDAT reports which post payments based on checks issued. (3) The "Servicing Company" will conduct a quarterly analysis of the adequacy of the "Deposit" in the "Servicing rompany's" "Loss Fund Account" based upon the most current three (3) months of "Loss Fund Account" activity. If the analysis determines that the current average "Loss Fund _Account" activity exceeds the then existing "Deposit," then the "Servicing Company" will authorize its bank to initiate an adjustment direct debit in the amount necessary to bring the "Deposit" to the level stipulated in Section II.A.(1), above. The "Servicing Company" will adjust the average daily direct debit to the revised average daily amount in accordance with Section II.A.(2) above. (4) The "Servicing Company" will notify the "Client," via telephone, whenever any single claim and/or loss payment or associated allocated expense payment is made for twenty-five thousand dollars ($25,000) or more, and these amounts will be included in the direct debit along with the daily budgeted amount. The "Servicing Company" will not consider such amounts in arriving at the daily hiidgpted direct debits and will not consider such amounts -5- In ..omputfng the necessary "Deposit' required of the "Client" as set forth in Sectlon II.A. M above. (5) An appropriate letter, hereinafter referred to as the "Letter of Authority," will be provided, within fifteen (15) days from the effective date of this contract, to the "Servicing Company's" bank authorizing the "Servicing Company's" bank to initiate the necessary daily direct debits against the "Client's" designated bank account for deposit to the "Loss Fund Account" at the "Servicing Company's" bank. In addition, the "Servicing Company" will be furnished by the "Client" with such account documentation with respect to the "Loss Fund Account" that may be required by the "Servicing Company's" bank and the "Servicing Company" respectively. (6) The "Servicing Company" shall be and hereby is indemnified by the "Client" from and against any and all losses, damages, suits, actions, proceedings, and expenses, including, without limitation, all attorneys' fees, incurred or suffered by the "Servicing Company" in connection with (i) the "Loss Fund Account" established by the "Servicing Company" at the "Servicing Company's" bank for the benefit of the "Client;" or (ii) any drafts, checks, items, overdrafts or other charges to, on, or related in any way to the "Loss Fund Account" established by the "Servicing Company" at the "Servicing Company's" bank for the benefit of the "Client." This provision shall not include losses, damages, suits, actions, proceedings and expenses resulting from any negligent, tortious, fraudulent, or dishonest actions by the "Servicing Company," its officers, agents or employees. (7) The "Servicing Company" may draw and authorize checks, drafts, and other items on the "Loss Fund Account" only if the "Servicing Company" determines that it has sufficient funds in the "Loss Fund Account" to cover such checks, drafts, and other items. (8) The "Servicing Company" may terminate the "Loss Fund Account" at any time, in its sole discretion, with or without cause. (9) As security for the due and punctual payment and performance of all indebtedness and obligations of the "Client" to the "Servicing Company," whether now existing or hereafter arising, however evidenced, whether direct or indirect, absolute or contingent, individually or jointly with any other person, and including, without limitation, all indebtedness, payments, reimbursement of funds, and other moneys owed by the "Client" to the "Servicing Company" pursuant to this contract (the "Secured Obligations"), the "Client" hereby pledges, assigns, transfers, sets over, conveys and delivers to the "Servicing Company," and hereby grants to the "Servicing Company," a security interest in all right, title and interest of the "Client" in and to the moneys from time to -6- time on deposit in tho "Loss Fund Account" including, without limitation, the "Deposit" (the "Funds"). The "Client" acknowledges and agrees that, so long as this contract remains in force and effect, the "Funds" shall constitute cash collateral as that term is defined by Section 363(a) of the Bankruptcy Code, 11 U.S.C. Section 363(a). The "Client" further acknowledges and agrees that the foregoing security interest is perfected in favor of the "Servicing Company" by the "Servicing Company's" control over the accounts into which the "Funds" are deposited and, in the alternative, by possession of the 'Funds" by the "Servicing Company's" bank where the "Loss Fund Acr_ount" is established, who, for purposes of the security interest, shall be and is hereby deemed to be the Bailee of the "Servicing Company" within the meaning of Section 9-305 of the Uniform Commercial Code. The "Client" hereby authorizes the "Servicing Company" at any time, and regardless of whether there exists or is continuing an event of default under this contract, to apply and setoff without notice any indebtedness due or to become due to the "Servicing Company" from the "Client," including, without limitation, the "Funds," against and in satisfaction of any of the "Secured Obligations" of the "Client" secured hereby, regardless of the nature of such obligations or the time they arise. (10) The "Client" also agrees to provide the "Servicing Company," within fifteen (15) days from the effective date of this contract, with financial security in the form of a "Loss Fend Fscrow Account," which account shall be maintained with the "Client's" depository bank, and which account shall at all times be available to the "Servicing Company" to ensure that (i) the "Loss Fund Account" is at all times funded in the amounts necessary to enable the "Servicing Company" to pay claims and/or losses and associated allocated expenses as set forth in this contract, and (ii) service fees are paid as set forth in this contract. Such financial security shall be equal in amount to two (2) months' anticipated payments of claims and/or losses and associated allocated expenses, or fifty thousand dollars ($50,000), whichever is greater. The "Servicing Company" will conduct a quarterly analysis of the "Loss Fund Account" activity based upon the three (3) most current months of "Loss Fund Account" activity. If the analysis determines that the "Loss Fund Account" activity warrants an increase in the required financial security hereunder, the "Servicing Company" will notify the "Client" of the required increase and the "Client" will provide such increase to the "Servicing Company" within thirty (30) days of such notice. (11) The "Servicing Company" will issue checks from the "Loss Fund Account" for amounts in excess of the "Client's" annual aggregate self-insurance retention unless the "Client" specifically instructs the "Servicing Company" to the contrary so long as the "Loss Fund Account" balance is adeqliate to accommodate such amounts or necessary -7- additional deposits are made by the "Client" to the "Loss Fund Account" to adequately accommodate such amounts. The "Servicing Company" will not intentionally issue a check from the "Loss Fund Account" in payment of any amount in excess of the "Client's" specific per claimant or per occurrence self-insurance retention, as identified by the "Client" to the "Servicing Company," until such time as the "Client" transfers funds for the full amount of such payment into the "Loss Fund Account." The "Servicing Company" assumes and has no responsibility or obligation to recover from any of the "Client's" excess insurer(s) any amounts represented by checks issued from the "Loss Fund Account." B. To pay to the "Servicing Company" the claim service fee as prescribed in this contract. C. To pay to the "Servicing Company," in addition to the claim Service fee as prescribed in this contract, at its then prevailing hourly rate and expense method of billing for all claims service for all claims and/or losses previously handled or attempted to be handled by any person, firm or corporation or the "Client" before being assigned to the "Servicing Company." D. To pay all allocated loss expense, as defined herein, in addition to the claim service fee to be paid to the "Servicing Company" as prescribed in this contract. E. To allow "Servicing Company" to control, handle and settle all claims following within its discretionary settlement authority. The "Servicing Company" may exercise its judgment in connection with the above described authority provided that the "Servicing Company" undertakes the following actions: (1) Keep the City fully informed as to the nature and status of said claim or claims. (2) Inform, prior to settlement, City of the settlement value of the claim or claims as determined by "Servicing Company." F. To indemnify, defend, and hold harmless the "Servicing Company" and/or its employees in the event of an adverse result or judgment when the "Servicing Company" could have settled the claim and/or loss within its discretionary settlement authority limit, if the "Servicing Company" is not guilty of error, other than error in judgment, omission, tort, intentional tort, or other negligence unless such actions were taken at the specific direction of the "Client." G. To indemnify, defend, and hold harmless the "Servicing Company" and/or its employees in the event the "Servicing Company," acting at the specific direction of the "Client," becomes liable to any third parties. H. To indemnify, defend, and hold harmless the "Servicing Company" and/or its employees if the "Servicing Company" or any of its -8- employees are named as a defendant in any action (i) where the plaintiff's cause of action involved a claim hereunder and (ii) where there are no allegations of errors, omissions, torts, intentional torts, or other negligence on the part of the "Servicing Company." rII. THE "SERVICING COMPANY" AND THE "CLIENT" MUTUALLY AGREE AS FOLLOWS: A. The term of this contract is continuous from its effective date for five (S) years. However, the claim service fees shall be subject to negotiation at each twelve (12) month anniversary date. The contract can be terminated by either the "Servicing Company" or the "Client" with or without cause and for any reason whatsoever by sixty (60) days written prior notice. A. The "Client" shall have the option upon termination of this contract: (1) To self -handle to a conclusion all claims and/or losses and associated services pending on the date of termination of this contract, such handling not to result in any expense or reduction in contract revenue to the "Servicing Company" previously earned or incurred on said claim or claims; or (2) To have the "Servicing Company" handle and adjust to a conclusion all claims and/or losses pending on the date of termination of this contract. Sufficient funds of the "Client," including allocated claim and/or loss expense, shall remain available to the "Servicing Company" to liquidate such claims and/or losses. C. The flat rate per claimant claim service fees reflected in this contract include the provision of claim services by the "Servicing Company" for the "Client" for a period of two (2) years from the date of accident/ occurrence for all accident/occurrence lines of exposure and two (2) years from the date claim is made for all claims made lines of exposure. Any claim(s) not concluded within such time parameters shall be handled to a conclusion by the "Servicing Company" for the "Client" from that date forward on a time and expense basis at the "Servicing Company's" then prevailing hourly rate and expense method of billing. D. This contract does not include any Risk Control Services, activities, functions and/or responsibilities whatsoever and specifically excludes any Risk Control Services, activities, functions and/or responsibilities. E. Allocated Loss Expense shall mean and include all expense items such as attorneys' fees, commercial photographers' fees, experts' fees (i.e., engineers, physicians, chemists, etc.), fees for independent medical examinations, rehabilitation fees, trial/hearing attendance fees, witnesses' travel expense, extraordinary claim investigation and/or travel expense incurred by the "Servicing Company" at the. request of the "Client," court -9- reporters fees, transcript fees, the cost of obtaining public records, witness fees, auto appraisal or property appraisal fees, all outside expense items, and any other similar fee, cost or expense associated with the investigation, negotiation, settlement or defense of any claim hereunder or as required for the collection of subrogation on behalf of the "Client." F. No periodic reports or reports on the status of individual claim and/or loss files, other than as provided in Sections I.F., I.G., and I.H., are required from the "Servicing Company" unless the reserve amount on any given claim and/or loss exceeds the discretionary settlement authority limit of the "Servicing Company." If a given claim and/or loss reserve amount exceeds the discretionary settlement authority limit of the "Servicing Company," reports will be submitted by the "Servicing Company" to the "Client" as may be mutually agreed to on an individual claim and/or loss file basis. G. The "Client" shall have the right during the term of this contract or during such time after the expiration or termination of this contract as may be necessary to perform an audit upon the book of accounts, bank accounts, claim files or other records maintained by the "Servicing Company" to the extent such records reflect or concern the activities of the "Servicing Company" under this contract. In the event such audit reveals that overpayments have been made to the "Servicing Company," then in such event the "Client" shall present to the "Servicing Company" a detailed copy of said audit showing the basis of such alleged overpayment and the "Servicing Company" shall have forty-five (45) days to review said detailed audit. In the event the "Servicing Company" disputes the detailed audit presented, the parties hereto agree to meet and confer to resolve any such dispute. H. In the event that the "Servicing Company" contends that it has been underpaid by the "Client" in accordance with the terms of this contract, it shall present to the "Client" a detailed account showing the basis of such alleged underpayment and the "Client" shall have forty-five (45) days to review said detailed statement. In the event the "Client" disputes the detailed statement presented, the parties hereto agree to meet and confer to resolve any such dispute. I. Both parties agree that the services to be performed under this agreement require good, sufficient and timely communications between the "Servicing Company" and the "Client" and to this end both parties agree to give their full attention to this undertaking. J. The "Client" retains full authority to select legal defense attorneys of the "Client's" choosing. K. This contract is made and entered into in Lubbock County, Texas, and accordingly the law of the State of Texas shall govern this contract and the interpretation of same. -10- L. Venue upon any dispute of this contract shall be in Lubbock County, Texas. IN WITNESS WHEREOF, the "Servicing Company" and the "Client" have caused this contract to be executed by the persons authorized to act in their respective names. ATTEST: BY: Betty JCIaon, City Se&etary APPROVED AS TO CONTENT: BY:_ j�%7 - ort Massengale, Assit be ity Manger for Financial Services APPROVED AS TO FORM: h BY: d G. Vandiver, First Assistant City Attorney OF August 1994 -11- CR7w-le�rawly RD�COMPANY BY: is 2 TITLE: Vice President EXHIBIT A FILE RETENTION AND DESTRUCTION POLICY LIABILITY FILES: Destroy two (2) years after applicable statute of limitations has expired. Exceptions: a. Suits - retain until expiration of appellate process. Then destroy. b. Mental Incompetents - retain indefinitely. C. Infant (Minor) Claims - retain until infant reaches majority plus applicable statute of limitations plus two (2) years. FIRST PARTY CLAIMS, SUBROGATION ARBITRATION, INCIDENT REPORTS, AND BOND LOSSES: Destroy one (1) year after file closing. Exceptions: a. Suits - retain until expiration of appellate process. Then destroy. b. Prevailing Statute Precludes Destruction in one (1) year. WORKERS' COMPENSATION CLAIMS: Medical Only Claims Excluding Occupational Disease Claims: Destroy six (6) months after applicable statute of limitations has expired. Exceptions: a. Prevailing Statute Precludes Destruction in six (6) months. Other Than Medical Only Claims Excluding Occupational Disease Claims: Destroy one (1) year after applicable statute of limitations has expired. Exceptions• A. Formal or Informal Hearing Level Claims - retain until 'expiration of appellate process. Then destroy. b. Prevailing Statute Precludes Destruction in one (1) year. Occupational Disease Claims: Destroy four (4) years after applicable statute of limitations has expired. Exceptions: a. Formal or Informal Hearing Level Claims - retain until expiration of appellate process. Then destroy. b. Prevailing Statute Precludes Destruction in four (4) years. -12- EXHIBIT "B" The "Servicing Company's" settlement authority shall be limited to that authority granted to it by the Safety Coordinator on a claim by claim basis. The foregoing shall in no manner limit the ability of the "Servicing Company" regarding the following: 1. to make settlement recommendations to the City of Lubbock; 2. to limit "Servicing Company's" ability to make periodic payments for expenses in connection with the defense of a claim as provided by this agreement; 3. to make payments in accordance with the settlement of workers' compensation claims as provided by the laws of the State of Texas. -13- SS/lm g:Wbrarykntrct94.doc CRAWFORD & COMPANY CLAIM SERVICE CONTRACT ADDENDUM # 1 THIS AGREEMENT, made and entered into effective this twenty-fifth day of August, 1995, between CRAWFORD & COMPANY, a corporation of the State of Georgia, hereinafter referred to as the "Servicing Company," and CITY OF LUBBOCK, a governmental entity of the State of Texas, hereinafter referred to as "Client." WITNESSETH THAT WHEREAS, the "Servicing Company" operates a business known as CRAWFORD & COMPANY, Claims Adjusters, and WHEREAS, The "Client" desires to employ the "Servicing Company" as its Claims Adjusters, to service its claims for its self -insured exposures as stated in Paragraph (3) hereunder, up to its self -insured retention. NOW THEREFORE, the "Servicing Company" and the "Client" mutually agree as follows: (1) The general agreement pages, to which this is attached, are made a part hereof as though fully repeated and set out herein. (2) This contract covers Claim Service for the "Client" in the U.S.A. (3) The "Client" shall pay the "Servicing Company" fees as follows: 170 State Workers' Compensation Medical Only claims @ $68.00 per claimant = $ 11,560.00 90 State Workers' Compensation Indemnity claims @ $655.00 per claimant = $ 58,950.00 30 Automobile Liability claims @ $240.00 per claimant = $ 7,200.00 200 General Liability claims @ $240.00 per claimant = $ 48,000.00 $125,710.00 The "Client" agrees to pay the "Servicing Company" at the rate of one -twelfth (1/12) of $125,710.00 per month ($10,475.83). At the first of each monthly period during the term of this contract, monthly billings in said amount will be submitted to the "Client" by the "Servicing Company" and such billings will be paid by the "Client" to the "Servicing Company" within forty-five days of such billing. Twelve months after the contract term, there shall be a final accounting as to the actual number of claimants handled by the "Servicing Company" and the "Servicing Company" will be entitled to compensation at the above flat rates for each claimant in excess of the above numbers. Likewise, the "Client" shall be entitled -1- to a refund on tho tame basis if the number of claimants does not reach the above projections. If the final accounting results in a refund due the "Client," the "Servicing Company" will make such refund within ninety (90) days of the "Client's" written request for such refund. If the final accounting results in the "Client" owing the "Servicing Company" additional sums, the "Client" will pay the "Servicing Company" within ninety (90) days from the date of the "Servicing Company's" billing for such additional sums. Any single accident or occurrence resulting in ten or more declared or potential claimants shall be treated as a catastrophe. Such catastrophe cases shall be handled on a Time and Expense basis by the "Servicing Company" at its then prevailing hourly rate and expense method of billing. Contractual Liability claims, Personal Injury Liability claims, Employer's Liability claims, Occupational Disease claims, and subrogation investigation shall be handled on a Time and Expense basis by the "Servicing Company" at its then prevailing hourly rate and expense method of billing. All claim services in Puerto Rico and the Virgin Islands shall he provided by the "Servicing Company" on a Time and Expense basis at its then prevailing hourly rate and expense method of billing. Billings for time and expense claims will be submitted to the "Client" by the "Servicing Company" when such claims are concluded, or if any such claims have not been concluded and have accumulated billing amounts of Two Hundred Dollars ($200) or more, the "Servicing Company" will submit interim time and expense billings to the "Client" within six (6) months from the date of assignment of such claims to the "Servicing Company." Subsequent interim billings will be submitted thereafter only when any such claim has acc»mulated 1 billing amount of Two Hundred Dollars ($200) or more. Claims so interim billed shall continue to be handled by the "Servicing Company" after interim billing on a time and expense basis at the "Servicing Company's" then prevailing hourly rate and expense method of billing. Such time and expense billings submitted to the "Client" by the "Servicing Company" will be paid by the "Client" to the "Servicing Company" within thirty (30) days of billing. For all Time and Expense lines of coverage, SISDAT shall be charged on the basis of $15 per claimant which shall be reconciled by the "Servicing Company" in the same manner ns stated above. In addition to the compensation of the "Servicing Company" set forth herein, any taxes, except taxes on income, which the "Servicing Company" may be required to pay or collect or which may be incurred by or assessed against the "Servicing Company," tinder any existing or future law, in any way relating to the sale, delivery, rendering or provision of services to the "Client" pursuant to this contract, including but not limited to any Canadian (Federal, Provincial, territorial or local) or any domestic (Federal, State or local) sales, use, personal property, ad valorem or other tax shall be for the account of the "Client." The "Servicing Company" shall bill the "Client" and the "Client" shall promptly pay the "Servicing Company" all such taxes in accordance with the provisions of the applicable law and regulations concerning collection of such taxes and the "Servicing Company" shall remit such taxes to the appropriate taxing authority. The fees of the "Servicing Company" apply only to claims handling within the "Client's" self-insurance retention. Once the "Client's" -2- self-insitrance rotention(s), either specific or annual aggregate, has/have Neon exceoded, the "Servicing Company" will be considered to have earned its fee(s) As spy forth cinder this contract. GENERAL AGREEMENTS I. THE "SERVICING COMPANY" AGREES: A. To review all claim and/or loss reports with claim and/or loss dates incurred during the term of this contract for all Accident/occurrence lines of exposure or claims and/or losses mnde during the term of this contract for all claims made lines of exposure, involving the hereinAhove stated exposures to the "Client." B. To investigate, with reasonable diligence, all reported claims And/or losses As defined in Section i.A., above. C. To investigate, adjust, settle or resist all such losses and/or claims as defined in Section I.A., within the discretionary settlement Authority limit of the "Servicing Company."'fie settlement authority of the 'Servicing Caparry" shall be described in exhibit 'V'- n. To investigate, adjust, settle or resist all such losses and/or claims as defined in Section I.A., in excess of the discretionary settlement authority limit of the "Servicing Company" with specific prior Approval of the "Client." E. To furnish all claim forms necessary for proper claims administration. F. To establish claim and/or loss files for each reported claim and/or loss. (Claim and/or loss files are subject to review by the "Client" at any reasonable time, without prior notice.) G. That the records, reports and other information created, gathered, or maintained by "Servicing Company" in discharging its obligations to City under this agreement may well be considered public records and accordingly such public records may not be destroyed (V.A.P.C. Sec. 37.10). "Servicing Company" Agrees to care for and return all of its records maintained by it in the discharge of this contract to City for proper storage. The policy described in Exhibit "A" shall be followed by "Servicing Company" as to when a record, report or other information shall he rettirned to City. H. To furnish the "Client" with monthly Loss Run, monthly Loss Fund Activity and gnarterly Loss Cause Analysis claim statistical information from the "Servicing Company's" SISDAT Department. The "Client" shall designate the breaks for the total and subtotals for each division, region, etc. In the event the "Client" desires a statistical report of its own design, or additional reports from SISDAT, a separate quotation for the Additional cost will be submitted to the "Client" for approval. The statistical information will be furnished to the "Client" either as hard copy or microfiche. _3 Exhibit A Exhibit B 1. To maintain adequate General Liability, Automobile Liability, Workers Compensation, Fidelity Bond, And Errors and Omissions insurance coverage. J. To establish an account (regular demand deposit account or minimum balance controlled disbursement account), hereinafter referred to as the "Loss Fund Account," with a bank in Atlanta, Georgia of the choice of the "Servicing Company" for the purpose of paying claims and/or losses and associated allocated loss expense and to maintain And perform monthly reconciliations of that account. The cost of any bank charges shall be paid by the "Client." K. To indemnify, defend, and hold harmless the "Client" with respect to any claims asserted as a result of any errors, omissions, torts, intentional torts or other negligence on the part of the "Servicing Company" and/or its employees unless the complained of actions of the "Servicing Company" were taken at the specific direction of the "Client." L. To report directly to the "Client" and to have no responsibility for reporting to or placing any specific excess insurers) or annual aggregate excess insurer(s) on notice of any claim(s) that is/are or may be required to be reported or notice given to such excess insurer(s) under any such excess insurance policies available to the "Client." The "Servicing Company" will continue to handle claims once the "Client's" self-insurance retention, either specific or annual aggregate, has been exceeded if mutually agreed to by the "Client" and excess insurer(s), if there is no controversy as to coverage, liability, and damages between the "Client" and its excess insurer(s). Such further claims handling will be provided by the "Servicing Company" at time and expense based upon its then prevailing hourly rate and expense method of billing with the excess insurer(s) being responsible for supervision of the "Servicing Company" and payment of the "Servicing Company's" time And expense service hills. M. That its wholly owned subsidiary, Risk Sciences Group, Inc., will provide the services set forth in Exhibit B, attached hereto and made a part hereof, for the consideration and in accordance with the terms and conditions of the agreement therein set forth. II. THE "C, UNT" AGREES: A. To make funds Available that the "Servicing Company" may draw from at any time and from time to time for claim and/or loss payments and for associated allocated expense within the discretionary settlement authority limit of the "Servicing Company" and for claim and/or loss payments in excess of the discretionary settlement authority limit of the "Servicing Company." (1) On or before the effective date of this contract, the "Client" will provide an initial imprest deposit to the "Servicing Company" in an amount equivalent to five -4- (5) banking days of average Anticipated claim and/or loss and associated allocated expense payments or ten thousand dollars (t10,000), whichever is greater, to be maintained by the "Servicing Company" as A loss fund deposit, hereinafter referred to as the "Deposit," for payment of claims and/or losses and associated allocated expense from the "Servicing Company's" "Loss Fund Account." (2) Reimbursement to the "Loss Fund Account" will be made by a daily direct debit executed by the "Servicing Company's" bank against the "Client's" designated bank account for deposit into the "Loss Fund Account" at the "Servicing Company's" bank. The amount of the daily direct debit will be limited to the amount computed by the "Servicing Company" who will instruct its bank as to the appropriate amount. The amount of the daily direct debit will be determined by the "Servicing Company" computing the average claim and/or loss and associated allocated expense payments made daily for the "Client." Each day the same average amount will be deposited into the "Servicing Company's" "Loss Fund Account" via a direct debit drawn against the "Client's" designated bank account. At the end of each month, beginning with the end of the first month from the effective date of this contract, the "Servicing Company" will compare the total deposits to the "Loss Fund Account," including all direct debits resulting from the average daily budgeted amount and any amount as specified in Section II.A.(4) below, made during the month to the "Servicing Company's" "Loss Fund Account" to the actual claim payment account detailed in the SISDAT Monthly Loss Fund Activity and Loss Run Reports and an adjustment direct debit will be made, so the monthly deposits are equal to the totals shown on such SISDAT reports which post payments based on checks issued. (3) The "Servicing Company" will conduct a quarterly analysis of the adequacy of the "Deposit" in the "Servicing rompany's" "Loss Fund Account" based upon the most current three (3) months of "Loss Fund Account" activity. If the analysis determines that the current average "Loss Fund .Account" activity exceeds the then existing "Deposit," then the "Servicing Company" will authorize its bank to initiate An adjustment direct debit in the amount necessary to bring the "Deposit" to the level stipulated in Section II.A.(1), above. The "Servicing Company" will adjust the average daily direct debit to the revised average daily Amount in accordance with Section II.A.(2) above. (4) The "Servicing Company" will notify the "Client," via telephone, whenever any single claim and/or loss payment or associated allocated expense payment is made for twenty-five thousand dollars ($25,000) or more, and these amounts will be included in the direct debit along with the daily budgeted amount. The "Servicing Company" will not consider such amounts in arriving at the daily huAgPted direct debits and will not consider such amounts -5- in -omputing the necessary "Deposit' required of the "Client" as set forth in Section II.A.(3) above. (5) An appropriate letter, hereinafter referred to as the "Letter of Authority," will be provided, within fifteen (15) days from the effective date of this contract, to the "Servicing Company's" bank authorizing the "Servicing Company's" bank to initiate the necessary daily direct debits against the "Client's" designated bank account for deposit to the "Loss Fund Account" at the "Servicing Company's" bank. In addition, the "Servicing Company" will be furnished by the "Client" with such account documentation with respect to the "Loss Fund Account" that may be required by the "Servicing Company's" bank and the "Servicing Company" respectively. (6) The "Servicing Company" shall be and hereby is indemnified by the "Client" from and against any and all losses, damages, suits, actions, proceedings, and expenses, including, without limitation, all attorneys' fees, incurred or suffered by the "Servicing Company" in connection with (i) the "Loss Fund Account" established by the "Servicing Company" at the "Servicing Company's" bank for the benefit of the "Client;" or (ii) any drafts, checks, items, overdrafts or other charges to, on, or related in any way to the "Loss Fund Account" established by the "Servicing Company" at the "Servicing Company's" bank for the benefit of the "Client." This provision shall not include losses, damages, suits, actions, proceedings and expenses resulting from any negligent, tortious, fraudulent, or dishonest actions by the "Servicing Company," its officers, agents or employees. (7) The "Servicing Company" may draw and authorize checks, drafts, and other items on the "Loss Fund Account" only if the "Servicing Company" determines that it has sufficient funds in the "Loss Fund Account" to cover such checks, drafts, and other items. (8) The "Servicing Company" may terminate the "Loss Fund Account" at any time, in its sole discretion, with or without Cause. (9) As security for the due and punctual payment and performance of all indebtedness and obligations of the "Client" to the "Servicing Company," whether now existing or hereafter arising, however evidenced, whether direct or indirect, absolute or contingent, individually or jointly with any other person, and including, without limitation, all indebtedness, payments, reimbursement of funds, and other moneys owed by the "Client" to the "Servicing Company" pursuant to this contract (the "Secured Obligations"), the "Client" hereby pledges, assigns, transfers, sets over, conveys and delivers to the "Servicing Company," and hereby grants to the "Servicing Company," a security interest in all right, title and interest of the "Client" in and to the moneys from time to -6- time on deposit in thn "Lass Fund Account" including, without limitation, the "Deposit" (the "Funds"). The "Client" acknowledges and agrees that, so long as this contract remains in force and effect, the "Funds" shall constitute cash collateral as that term is defined by Section 363(a) of the Bankruptcy Code, 11 U.S.C. Section 363(a). The "Client" further acknowledges and agrees that the foregoing security interest is perfected in favor of the "Servicing Company" by the "Servicing Company's" control over the accounts into which the "Funds" are deposited and, in the alternative, by possession of the "Funds" by the "Servicing Company's" bank where the "Loss Fund Account" is established, who, for purposes of the security interest, shall be and is hereby deemed to be the Bailee of the "Servicing Company" within the meaning of Section 9-305 of the Uniform Commercial Code. The "Client" hereby authorizes the "Servicing Company" at any time, and regardless of whether there exists or is continuing an event of default under this contract, to apply and setoff without notice any indebtedness due or to become due to the "Servicing Company" from the "Client," including, without limitation, the "Funds," against and in satisfaction of any of the "Secured Obligations" of the "Client" secured hereby, regardless of the nature of such obligations or the time they arise. (10) The "Client" also agrees to provide the "Servicing Company," within fifteen (15) days from the effective date of this contract, with financial security in the form of a "insa Fend Escrow Account," which account shall be maintained with the "Client's" depository bank, and which account shall at all times be available to the "Servicing Company" to ensure that (i) the "Loss Fund Account" is at all times funded in the amounts necessary to enable the "Servicing Company" to pay claims and/or losses and associated allocated expenses as set forth in this contract, and (ii) service fees are paid as set forth in this contract. Such financial security shall be equal in amount to two (2) months' anticipated payments of claims and/or losses and associated allocated expenses, or fifty thousand dollars ($50,000), whichever is greater. The "Servicing Company" will conduct a quarterly analysis of the "Loss Fund Account" activity based upon the three (3) most current months of "Loss Fund Account" activity. If the analysis determines that the "Loss Fund Account" activity warrants an increase in the required financial security hereunder, the "Servicing Company" will notify the "Client" of the required increase and the "Client" will provide such increase to the "Servicing Company" within thirty (30) days of such notice. (11) The "Servicing Company" will issue checks from the "Loss Fund Account" for amounts in excess of the "Client's" annual aggregate self-insurance retention unless the "Client" specifically instructs the "Servicing Company" to the contrary so long as the "Loss Fund Account" balance is adequate to accommodate such amounts or necessary -7- additional deposits are made by the "Client" to the „Loss Fund Account" to adequately accoaunodate such amounts. The "Servicing Company" will not intentionally issue a check from the "boss Fund Account" in payment of any amount in excess of the "Client's" specific per claimant or per occurrence self-insurance retention, as identified by the "Client" to the "Servicing Company," until such time as the "Client" transfers funds for the full amount of such payment into the "Loss Fund Account." The "Servicing Company" assumes and has no responsibility or obligation to recover from any of the "Client's" excess Insurer(s) any Amounts represented by checks issued from the "Loss Fund Account." B. To pay to the "Servicing Company" the claim service fee as prescribed in this contract. C. To pay to thn "Servicing Company," in addition to the claim service fee as prescribed in this contract, at its then prevailing hourly rate and expense method of billing for all claims service.for all claims and/or losses previously handled or attempted to be handled by any person, firm or corporation or the "Client" before being assigned to the "Servicing Company." D. To pay all allocated loss expense, as defined herein, in addition to the claim service fee to be paid to the "Servicing Company" as prescribed in this contract. E. To Allow "Servicing Company" to control, handle and settle all claims following within its discretionary settlement authority. The "Servicing Company" may exercise its judgment in connection with the above described authority provided that the "Servicing Company" undertakes the following actions: (1) Keep the City fully informed as to the nature and stAtus of said claim or claims. (2) Inform, prior to settlement, City of the settlement value of the claim or claims as determined by "Servicing Company." F. To indemnify, defend, and hold harmless the "Servicing Company" and/or its employees in the event of an adverse result or judgment when the "Servicing Company" could have settled the claim and/or loss within its discretionary settlement authority limit, if the "Servicing Company" is not guilty of error, other than error in judgment, omission, tort, intentional tort, or other negligence unless such actions were taken at the specific direction of the "Client." G. To indemnify, defend, and hold harmless the "Servicing Company" and/or its employees in the event the "Servicing Company," acting at the specific direction of the "Client," becomes liable to any third parties. H. To indemnify, defend, and hold harmless the "Servicing Company" and/or its employees if the "Servicing Company" or any of its -8- employees Are nnmed as a defendant in any action (i) where the plaintiff's cause of action involved a claim hereunder and GO where there are no allegations of errors, omissions, torts, intentional torts, or other negligence on the part of the "Servicing Company." rII. THE "SERVICING COMPANY" AND T1rF "CLIENT" MUTUALLY AGREE AS FOLLOWS: A. The term of this contract is continuous from its effective date for five (5) years. However, the claim service fees shall be subject to negotiation at each twelve (12) month anniversary date. The contract can be terminated by either the "Servicing Company" or the "Client" with or without cause and for any reason whatsoever by sixty (60) days written prior notice. A. The "Client" shall have the option upon termination of this contract: (1) To self -handle to a conclusion all claims and/or losses and associated services pending on the date of termination of this contract, such handling not to result in any expense or reduction in contract revenue to the "Servicing Company" previously earned or incurred on said claim or claims; Or (2) To have Lire "Servicing Company" handle and adjust to a conclusion all claims and/or losses pending on the date of termination of this contract. Sufficient funds of the "Client," including allocated claim and/or loss expense, shall remain available to the "Servicing Company" to liquidate such claims and/or losses. C. The flat rate per claimant claim service fees reflected in this contract include the provision of claim services by the "Servicing Company" for the "Client' for a period of two (2) years from the date of accident/ occurrence for all accident/occurrence lines of exposure and two (2) years from the date claim is made for all claims made lines of exposure. Any claim(s) not concluded within such time parameters shall be handled to a conclusion by the "Servicing Company" for the "Client" from that date forward on a time and expense basis at the "Servicing Company's" then prevailing hourly rate and expense method of billing. D. This contract does not include any Risk Control Services, activities, functions and/or responsibilities whatsoever and specifically excludes any Risk Control Services, activities, functions and/or responsibilities. E. Allocated Loss Expense shall mean and include all expense items such as attorneys' fees, commercial photographers' fees, experts' fees (i.e., engineers, physicians, chemists, etc.), fees for independent medical examinations, rehabilitation fees, trial/hearing attendance fees, witnesses' travel expense, extraordinary claim investigation and/or travel expense incurred by the "Servicing Company" at the request of the "Client," court -9- reporters fees, transcript fees, the cost of obtaining public records, witness fees, auto appraisal or property appraisal fees, all outside expense items, and any other similar fee, cost or expense associated with the investigation, negotiation, settlement or defense of any claim hereunder or as required for the collection of subrogation on behalf of the "Client." F. No periodic reports or reports on the status of individual claim and/or loss files, other than as provided in Sections I.F., I.G., and I.H., are required from the "Servicing Company" unless the reserve amount on any given claim and/or loss exceeds the discretionary settlement authority limit of the "Servicing Company.' If a given claim and/or loss reserve amount exceeds the discretionary settlement authority limit of the "Servicing Company," reports will be submitted by the "Servicing Company" to the "Client" as may be mutually agreed to on an individual claim and/or loss file basis. G. The "Client" shall have the right during the term of this contract or during such time after the expiration or termination of this contract as may be necessary to perform an audit upon the book of accounts, bank accounts, claim files or other records maintained by the "Servicing Company" to the extent such records reflect or concern the activities of the "Servicing Company" under this contract. In the event such audit reveals that overpayments have been made to the "Servicing Company," then in such event the "Client" shall present to the "Servicing Company" a detailed copy of said audit showing the basis of such alleged overpayment and the "Servicing Company" shall have forty-five (45) days to review said detailed audit. In the event the "Servicing Company" disputes the detailed audit presented, the parties hereto agree to meet and confer to resolve any such dispute. H. In the event that the "Servicing Company" contends that it has been underpaid by the "Client" in accordance with the terms of this contract, it shall present to the "Client" a detailed account showing the basis of such alleged underpayment and the "Client" shall have forty-five (45) days to review said detailed statement. In the event the "Client" disputes the detailed statement presented, the parties hereto agree to meet and confer to resolve any such dispute. I. Both parties agree that the services to be performed under this agreement require good, sufficient and timely communications between the "Servicing Company" and the "Client" and to this end both parties agree to give their full attention to this undertaking. J. The "Client" retains full authority to select legal defense attorneys of the "Client's" choosing. K. This contract is made and entered into in Lubbock County, Texas, and accordingly the law of the State of Texas shall govern this contract and the interpretation of same. -10- L. Venue upon any dispute of this contract shall be in Lubbock County, Texas. IN WITNESS WHEREOF, the "Servicing Company" and the "Client" have caused this contract to be executed by the persons authorized to act in their respective names. DATED THIS � V r 1� DAY OF % I(� J—�, T l 1995 CITY OF LUBBOCK BY: Mary Andr s TITLE: Director of Human Resources APPRO AS TO CQ BY: Scott Snider, Safety Coordinator APPROVED AS TO FORM: BY: � n D d G. Vandiver, First Assistant City Attorney CRAW RD COMPANY BY/- B.W. Crawly TITLE: Vice President -11- EXHIBIT A FILE RETENTION AND DESTRUCTION POLICY LIABILITY FILES: Destroy two (2) years after applicable statute of limitations has expired. Exceptions: a. Suits - retain until expiration of appellate process. Then destroy. b. Mental Incompetents - retain indefinitely. c. Infant (Minor) Claims - retain until infant reaches majority plus applicable statute of limitations plus two (2) years. FIRST PARTY CLAIMS, SUBROGATION/ARBITRATION, INCIDENT REPORTS, AND BOND LOSSES: Destroy one (1) year after file closing. Exceptions: a. Suits - retain until expiration of appellate process. Then destroy. b. Prevailing Statute Precludes Destruction in one (1) year. WORKERS' COMPENSATION CLAIMS: Medical Only Claims Excluding Occupational Disease Claims: Destroy six (6) months after applicable statute of limitations has expired. Exceptions: a. Prevailing Statute Precludes Destruction in six (6) months. Other Than Medical Only Claims Excluding Occupational Disease Claims: Destroy one (1) year after applicable statute of limitations has expired. Exceptions. A. Formal or Informal Hearing Level Claims - retain until expiration of appellate process. Then destroy. b. Prevailing Statute Precludes Destruction in one (1) year. Occupational Disease Claims: Destroy four (4) years after applicable statute of limitations has expired. Exceptions: a. Formal or Informal Hearing Level Claims - retain until expiration of appellate process. Then destroy. b. Prevailing Statute Precludes Destruction in four (4) years. -12- EXHIBIT "B" The "Servicing Company's" settlement authority shall be limited to that authority granted to it by the Safety Coordinator on a claim by claim basis. The foregoing shall in no manner limit the ability of the "Servicing Company" regarding the following: to make settlement recommendations to the City of Lubbock; 2. to limit "Servicing Company's" ability to make periodic payments for expenses in connection with the defense of a claim as provided by this agreement; 3. to make payments in accordance with the settlement of workers' compensation claims as provided by the laws of the State of Texas. -13- SS/lm &\18766\maa95 —Kesa tu% 4595 CRAWFORD & COMPANY CLAIM SERVICE CONTRACT ADDENDUM #2 THIS AGREEMENT, made and entered into effective this twenty-fifth day of August, 1996, between CRAWFORD & COMPANY, a corporation of the State of Georgia, hereinafter referred to as the "Servicing Company," and CITY OF LUBBOCK, a governmental entity of the State of Texas, hereinafter referred to as "Client." WITNESSETH THAT WHEREAS, the "Servicing Company" operates a business known as CRAWFORD & COMPANY, Claims Adjusters, and WHEREAS, The "Client" desires to employ the "Servicing Company" as its Claims Adjusters, to service its claims for its self -insured exposures as stated in Paragraph (3) hereunder, up to its self - insured retention. NOW THEREFORE, the "Servicing Company" and the "Client" mutually agree as follows: (1) The general agreement pages, to which this is attached, are made a part hereof as though fully repeated and set out herein. (2) This contract covers Claim Service for the "Client" in the U.S.A. (3) The "Client" shall pay the "Servicing Company" fees as follows: 181 State Workers' Compensation Medical Only claims @ $68.00 per claimant = $ 12,308.00 44 State Workers' Compensation Indemnity claims @ $655.00 per claimant = $ 28,820.00 66 Automobile Liability claims @ $240.00 per claimant = $ 15,840.00 172 General Liability claims @ $240.00 per claimant = $ 41,280.00 $ 98,248.00 The "Client" agrees to pay the "Servicing Company" at the rate of one -twelfth (1/12) of $98,248.00 per month ($8,187.33). At the first of each monthly period during the term of this contract, monthly billings in said amount will be submitted to the "Client" by the "Servicing Company" and such billings will be paid by the "Client" to -the "Servicing Company" within forty-five days of such billing. Twelve months after the contract term, there shall be a final accounting as to the actual number of claimants handled by the "Servicing Company" and the "Servicing Company" will be entitled to compensation at the above flat rates for each claimant in excess of the above numbers. Likewise, the "Client" shall be entitled to a refund on the !,amn bnsis if the number of claimants does not reach the above projoctions. If the final accounting results in a refund due the "Client," the "Servicing Company" will make such reftind within ninety (90) dAys of th•, "Client's" written request for such refund. If the final accounting results in the "Client" owing the "Servicing Company" additional sums, the "Client" will pAy the "Servicing Company" within ninety (90) days from the date of the "Servicing Company's" billing for such additional sues. Any single Accident or occurrence resulting in ten or more declared or potential claimants shnil be treated as a catastrophe. Such catastrophe cAses shall be handled on a Time and Expense basis by the "Servicing Company" at its then prevailing hourly rate And expense method of billing. Contractual Liability claims, Personal Injury Liability claims, Employer's Liability claims. Occupational Disease claims, and subrogation investigAtion shall be handled on a Time and Expense basis by the "Servicing Company" at its then prevailing hourly rate and expense method of billing. All claim services in Puerto Rico and the Virgin Islands shall he provided by the "Servicing Company" on a Time and Expense basis at its then prevailing hourly rate and expense method of billing. Billings for time and expense claims will be submitted to the "Client" by the "Servicing Company" when such claims are concluded, or if any such claims have not been concluded and have accumulated billing amounts of Two Hundred Dollars ($200) or more, the "Servicing Company" will submit interim time and expense billings to the "Client" within six (6) months from the date of assignment of such claims to the "Servicing Company." Subsequent interim billings will be submitted thereafter only when any such claim has acclimiilated n billing amount of Two Hundred Dollars ($200) or more. Claims so interim billed shall continfte to be handled by the "Servicing Company" after interim billing on a time and expense basis at the "Servicing Company's" then prevailing hourly rate and expense method of billing. Such time and expense billings submitted to the "Client" by the "Servicing Company" will be paid by the "Client" to the "Servicing Company" within thirty (30) days of billing. For all Time And Expense lines of coverage, SISDAT shall be charged on the bads of $15 per claimant which shall be reconciled by the "Servicing Company" in the same_ manner ns stated above. In addition to the compensation of the "Servicing Company" set forth herein, any taxes, except taxes on income, which the "Servicing Company" may be required to pay or collect or which may be incurred by or assessed against the "Servicing Company," tinder any existing or future law, in any way relating to the sale, delivery, rendering or provision of services to Lh,- "Client" pursuant to this contract, including but not limited to any Canadian (Federal, Provincial, territorial or local) or any domestic (Federal, State or local) sales, use, personal property, ad valorem or other tax shall be for the account of the "Client." The "Servicing Company" shall bill the "Client" and the "Client" shall promptly pay the "Servicing Company" all such taxes in accordance with the provisions of the applicable law and regulations concerning collection of such taxes and the "Servicing Company" shall remit such taxes to the appropriate taxing Authority. The fees of the "Servicing Company" apply only to claims handling within the "Client's" self-insurance retention. Once the "Client's" -2- self - insurance rPtention(s), either specific or heon exceeded, the "Servicing Company" will be its fee(s) AS set forth cinder this contract. annual aggregate, has/have considered to have earned GENF.RAi. AGREEMENTS 1. THE "SERVICING COMPANY" AGRFF.S: A. To review All claim and/or loss reports with claim and/or loss dates incurred during the term of this contract for all accident/occurrence lines of exposure or claims and/or losses mode during the term of this contract for all claims made lines of exposure, involving the hereinnhove stated exposures to the "Client." B. To investigate, with reasonable diligence, all reported claims and/or losses As defined in Section i.A., above. C. To investigate, adjust, settle or resist all such losses and/or claims as defined in Section I.A., within the discretionary settlement authority limit of the "Servicing Company." The settlement authority of the 'Servicing Carry" shall be described in exhibit "g'. n. To investigate, adjust, settle or resist all such losses and/or claims as defined in Section I.A., in excess of the discretionary settlement authority limit of the "Servicing Company" with sr.•cific prior ApprovAl of the "Client." E. To furnish all claim forms necessary for proper claims administration. F. To establish claim and/or loss files for each reported claim and/or loss. (Claim and/or loss files are subject to review by the "Client" at any reasonable time, without prior notice.) G. That the records, reports and other information created, gathered, or maintained by "Servicing Company" in discharging its obligations to City under this agreement may well be considered piihlic records and accordingly such public records may not be destroyed (V.A.P.C. Sec. 37.10). "Servicing Company" Agrees to care for and return all of its records maintained by it in the discharge of this contract to City for proper storage. The policy described in Exhibit "A" shall be followed by "Servicing Company" as to when a record, report or other information shall he returned to City. H. To furnish the "Client" with monthly Loss Run, monthly Loss Fund Activity and quarterly Loss Cause Analysis claim statistical information from the "Servicing Company's" SISDAT Department. The "Client" shall designate the breaks for the total and subtotals for each division, region, etc. In the event the "Client" desires a statistical report of its own design, or additional reports from SISDAT, a separate quotation for the additional cost will be submitted to the "Client" for approval. The statistical information will be furnished to the "Client" either as hard copy or microfiche. _g Exhibit A Exhibit B To maintain adequate General Liability, Automobile Liability, Workr.rs Compensation, Fidelity Bond, and Errors and Omissions insurance coverage. J. To establish an account (regular demand deposit account or minimum balance controlled disbursement account), hereinafter referred to as the "Loss Fund Account," with a bank in Atlanta, Georgia of the choice of the "Servicing Company" for the purpose of paying claims and/or losses and associated allocated loss expense and to maintain And perform monthly reconciliations of that Account. The cost of any bank charges shall be paid by the "Client." K. To indemnify, defend, and hold harmless the "Client" with respect to any claims asserted as a result of any errors, emissions, torts, intentional torts or other negligence on the part of the "Servicing Company" and/or its employees unless the complained of actions of the "Servicing Company" were taken at the specific direction of the "Client." L. To report directly to the "Client" and to have no responsibility for reporting to or placing any specific excess insurer(s) or annual aggregate excess insurer(s) on notice of any claim(s) that is/Are or may be required to be reported or notice given to such excess insurer(s) under any such excess insurance policies available to the "Client." The "Servicing Company" will continue to handle claims once the "Client's" self-insurance retention, either specific or annual aggregate, has been exceeded if mutually agreed to by the "Client" and excess insurer(s), if there is no controversy as to coverage, liability, and damages between the "Client" and its excess insurer(s). Such further claims handling will be provided by the "Servicing Company" at time and expense based upon its then prevailing hourly rate and expense method of billing with the excess insurer(s) being responsible for supervision of the "Servicing Company" and payment of the "Servicing Company's" time and expense service hills. H. That its wholly owned subsidiary, Risk Sciences Group, Inc., will provide the services set forth in Exhibit B, attached hereto and made a part hereof, for the consideration and in accordance with the terms and conditions of the agreement therein set forth. II. THE "C,T,TF.NV AGREES: A. To make funds Available that the "Servicing Company" may draw from at any time and from time to time for claim and/or loss payments and for associated allocated expense within the discretionary settlement authority limit of the "Servicing Company" and for claim and/or loss payments in excess of the discretionary settlement authority limit of the "Servicing Company." (1) On or before the effective date of this contract, the "Client" will provide an initial imprest deposit to the "Servicing Company" in an amount equivalent to five -4- (5) banking days of average Anticipated claim and/or loss and associated allocated expense payments or ten thousand dollars ($10,000), whichever is greater, to be maintained by the "Servicing Company" as A loss fund deposit, hereinafter referred to as the "Deposit," for payment of claims and/or losses and associated allocated expense from the "Servicing Company's" "Loss Fund Account." (2) Reimbursement to the "Loss Fund Account" will be made by a daily direct debit executed by the "Servicing Company's" bank against the "Client's" designated bank account for deposit into the "Loss Fund Account" at the "Servicing Company's" bank. The amount of the daily direct debit will be limited to the amount computed by the "Servicing Company" who will instruct its bank as to the appropriate amount. The amount of the daily direct debit will be determined by the "Servicing Company" computing the average claim and/or loss and associated allocated expense payments made daily for the "Client." Each day the same average amount will be deposited into the "Servicing Company's" "Loss Fund Account" via a direct debit drawn against the "Client's" designated bank account. At the end of each month, beginning with the end of the first month from the effective date of this contract, the "Servicing Company" will compAre the total deposits to the "Loss Fund Account," including all direct debits resulting from the average daily budgeted amount and any amount as specified in Section II.A.(4) below, made during the month to the "Servicing Company's" "Loss Fund Account" to the actual claim payment account detailed in the SISDAT Monthly Loss Fund Activity and Loss Run Reports and an adjustment direct debit will be made, so the monthly deposits are equal to the totals shown on such SISDAT reports which post payments based on checks issued. (3) The "Servicing Company" will conduct a quarterly analysis of the adequacy of the "Deposit" in the "Servicing company's" "Loss Fund Account" based upon the most current three (3) months of "Loss Fund Account" activity. If the analysis determines that the current average "Loss Fund Account" activity exceeds the then existing "Deposit," then the "Servicing Company" will authorize its bank to initiate An adjustment direct debit in the amount necessary to bring the "Deposit" to the level stipulated in Section II.A.(1). above. The "Servicing Company" will adjust the average daily direct debit to the revised average daily amount in accordance with Section II.A.(2) above. (4) The "Servicing Company" will notify the "Client," via telephone, whenever any single claim and/or loss payment or associated allocated expense payment is made for twenty-five thousand dollars ($25,000) or more, and these amounts will be included in the direct debit along with the An ily budgeted amount. The "Servicing Company" will not consider such amounts in arriving at the daily budgeted direct debits and will not consider such amounts -5- in ..omputing the necessary "Deposit' required of the "Client" as set forth in Section II.A.(3) above. (5) An appropriate letter, hereinafter referred to as the "Letter of Authority," will be provided, within fifteen (15) days from the effective date of this contract, to the "Servicing Company's" bank authorizing the "Servicing Company's" bank to initiate the necessary daily direct debits against the "Client's" designated bank account for deposit to the "Loss Fund Account" at the "Servicing Company's" bank. In addition, the "Servicing Company' will be furnished by the "Client" with such account documentation with respect to the "Loss Fund Account" that may be required by the "Servicing Company's" bank and the "Servicing Company" respectively. (6) The "Servicing Company" shall be and hereby is indemnified by the "Client" from and against any and all losses, damages, suits, actions, proceedings, and expenses, including, without limitation, all attorneys' fees, incurred or suffered by the "Servicing Company" in connection with (i) the "Loss Fund Account" established by the "Servicing Company" at the "Servicing Company's" bank for the benefit of the "Client;" or (ii) any drafts, checks, items, overdrafts or other charges to, on, or related in any way to the "Loss Fund Account" established by the "Servicing Company" at the "Servicing Company's" bank for the benefit of the "Client." This provision shall not include losses, damages, suits, actions, proceedings and expenses resulting from any negligent, tortious, fraudulent, or dishonest actions by the "Servicing Company," its officers, agents or employees. (7) The "Servicing Company" may draw and authorize checks, drafts, and other items on the "Loss Fund Account" only if the "Servicing Company" determines that it has sufficient funds in the "Loss Fund Account" to cover such checks, drafts, and other items. (8) The "Servicing Company" may terminate the "Loss Fund Account" at any time, in its sole discretion, with or withoott cause. (9) As security for the due and punctual payment and performance of all indebtedness and obligations of the "Client" to the "Servicing Company," whether now existing or hereafter arising, however evidenced, whether direct or indirect, absolute or contingent, individually or jointly with any other person, and including, without limitation, all indebtedness, payments, reimbursement of funds, and other moneys owed by the "Client" to the "Servicing Company" pursuant to this contract (the "Secured Obligations"), the "Client" hereby pledges, assigns, transfers, sets over, conveys and delivers to the "Servicing Company," and hereby grants to the "Servicing Company," a security interest in all right, title and interest of the "Client" in and to the moneys from time to -6- time on deposit in thn "Lnss Fund Account" including, without limitation, the "Oeposit" (the "Funds"). The "Client" acknowledges and agrees that, so long as this contract remains in force and affect, the "Funds" shall constitute cash collateral as that term is defined by Section 363(a) of the Bankruptcy Code, 11 U.S.C. Section 363(0. The "Client" further acknowledges and agrees that the foregoing security interest is perfected in favor of the "Servicing Company" by the "Servicing Company's" control over the accounts into which the "Funds" are deposited and, in the alternative, by possession of the "Funds" by the "Servicing Company's" bank where the "Loss Fund Account" is established, who, for purposes of the security interest, shall be and is hereby deemed to be the Bailee of the "Servicing Company" within the meaning of Section 9-305 of the Uniform Commercial Code. The "Client" hereby authorizes the "Servicing Company" at any time, and regardless of whether there exists or is continuing an event of default under this contract, to apply and setoff without notice any indebtedness due or to become due to the "Servicing Company" from the "Client," including, without limitation, the "Funds," against and in satisfaction of any of the "Secured Obligations" of the "Client" secured hereby, regardless of the nature of such obligations or the time they arise. (10) The "Client" also agrees to provide the "Servicing Company," within fifteen (15) days from the effective date of this contract, with financial security in the form of a "Los, Fend Escrow Account," which account shall be maintained with the "Client's" depository bank, and which account shall at all times be available to the "Servicing Company" to ensure that (i) the "Loss Fund Account" is at all times funded in the amounts necessary to enable the "Servicing Company" to pay claims and/or losses and associated allocated expenses as set forth in this contract, and (ii) service fees are paid as set forth in this contract. Such financial security shall be equal in amount to two (2) months' anticipated payments of claims and/or losses and associated allocated expenses, or fifty thousand dollars ($50,000), whichever is greater. The "Servicing Company" will conduct a quarterly analysis of the "Loss Fund Account" activity based upon the three (3) most current months of "Loss Fund Account" activity. If the analysis determines that the "Loss Fund Account" activity warrants an increase in the required financial security hereunder, the "Servicing Company" will notify the "Client" of the required increase and the "Client" will provide such increase to the "Servicing Company" within thirty (30) days of such notice. (11) The "Servicing Company" will issue checks from the "Loss Fund Account" for amounts in excess of the "Client's" annual aggregate self-insurance retention unless the "Client" specifically instructs the "Servicing Company" to the contrary so long as the "Loss Fund Account" balance is adequate to acccxmmodate such amounts or necessary -7- additional deposits are made by the "Client" to the "Loss Fund Account" to adequately accommodate such amounts. The "Servicing Company" will not intentionally issue a check from the "Loss Fund Account" in payment of any amount in excess of the "Client's" specific per claimant or per occurrence self-insurance retention, as identified.—b the "Client" to the "Servicing Company," until such time as the "Client" transfers funds for the full amount of such payment into the "Loss Fund Account." The "Servicing Company" assumes and has no responsibility or obligation to recover from any of the "Client's" excess insurer(s) any amounts represented by checks issued from the "Loss Fund Account." B. To pay to the "Servicing Company" the claim service fee as prescribed in this contract. C. To pay to the "Servicing Company," in addition to the claim service fee as prescribed in this contract, at its then prevailing hourly rate and expense method of billing for all claims service.for all claims and/or losses previously handled or attempted to be handled by any person, firm or corporation or the "Client" before being assigned to the "Servicing Company." D. To pay all allocated loss expense, as defined herein, in addition to the claim service fee to be paid to the "Servicing Company" as proscribed in this contract. E. To allow "Servicing Company" to control, handle and settle all claims following within its discretionary settlement authority. The "Servicing Company" may exercise its judgment in connection with the above described authority provided that the "Servicing Company" undertakes the following actions: (1) Keep the City fully informed as to the nature and status of said claim or claims. (2) Inform, prior to settlement, City of the settlement value of the claim or claims as determined by "Servicing Company." F. To indemnify, defend, and hold harmless the "Servicing Company" and/or its employees in the event of an adverse result or judgment when the "Servicing Company" could have settled the claim and/or loss within its discretionary settlement authority limit, if the "Servicing Company" is not guilty of error, other than error in judgment, omission, tort, intentional tort, or other negligence unlems such actions were taken at the specific direction of the "Client." G. To indemnify, defend, and hold harmless the "Servicing Company" and/or its employees in the event the "Servicing Company," acting at the specific direction of the "Client," becomes liable to any third parties. H. To indemnify, defend, and hold harmless the "Servicing Company" and/or its employes if the "Servicing Company" or any of its -8- employees ArA named as a defendnnt in any action (i) where the plaintiff s cause of action involved a claim hereunder and (ii) whore there Are no allegations of errors, omissions, torts, intentional torts, or other npRligence on the part of the "Servicing Company." III. THE "SERVICING COMPANY" AND 111F "CLIENT" MUTUALLY AGREE AS FOLLOWS: A. The term of this contract is continuous from its effective date for five (5) years. However, the claim service fees shall be subject to negotiation at eAch twelve (12) month anniversary date. The contract can be terminated by either the "Servicing Company" or the "Client" with or without cause and for any reason whatsoever by sixty (60) days written prior notice. R. The "Client" shall have the option upon termination of this contract: (1) To self -handle to a conclusion all claims and/or losses and associated services pending on the date of termination of this r-ontract, such handling not to result in any expense or reduction in contract revenue to the "Servicing Company" previously earned or incurred on said claim or claims; or (2) To have Lite "ServicLng Company" handle and adjust to a conclusion all claims and/or losses pending on the date of termination of this contract. Sufficient funds of the "Client," including allocated claim and/or loss expense, shall remain available to the "Servicing Company" to liquidate such claims and/or losses. C. The flat rate per claimant claim service fees reflected in this contract include the provision of claim services by the "Servicing Company" for the "Client" for a period of two (2) years from the date of accident/ occurrence for all accident/occurrence lines of exposure and two (2) years from the date claim is made for all claims made lines of exposure. Any claim(s) not concluded within such time parameters shall be handled to a conclusion by the "Servicing Company" for the "Client" from that date forward on a time and expense basis at the "Servicing Company's" then prevailing hourly rate and expense method of billing. D. This contract does not include any Risk Control Services, activities, functions and/or responsibilities whatsoever and specifically excludes any Risk Control Services, activities, functions and/or responsibilities. E. Allocated Loss Expense shall mean and include all expense items such as attorneys' fees, commercial photographers' fees, experts' fees (i.e., engineers, physicians, chemists, etc.), fees for independent medical examinations, rehabilitation fees, trial/hearing attendance fees, witnesses' travel expense, extraordinary claim investigation and/or travel expense incurred by the "Servicing Company" at the request of the "Client," court -9- reporters fees, transcript fees, the cost of obtaining public records, witness fees, auto appraisal or property appraisal fees, all outside expense items, and any other similar fee, cost or expense associated with the investigation, negotiation, settlement or defense of any claim hereunder or as required for the collection of subrogation on behalf of the "Client." F. No periodic reports or reports on the status of individual claim and/or loss files, other than as provided in Sections I.F., I.G., and I.H., are required from the "Servicing Company" unless the reserve amount on any given claim and/or loss exceeds the discretionary settlement authority limit of the "Servicing COmpAny." If a given claim and/or loss reserve amount exceeds the discretionary settlement authority limit of the "Servicing Company," reports will be submitted by the "Servicing Company" to the "Client" as may be mutually agreed to on an individual claim and/or loss file basis. G. The "Client" shall have the right during the term of this contract or during such time after the expiration or termination of this contract as may be necessary to perform an audit upon the book of accounts, bank accounts, claim files or other records maintained by the "Servicing Company" to the extent such records reflect or concern the activities of the "Servicing Company" under this contract. In the event such audit reveals that overpayments have been made to the "Servicing Company," then in such event the "Client" shall present to the "Servicing Company" a detailed copy of said audit showing the basis of such alleged overpayment and the "Servicing Company" shall have forty-five (45) days to review said detailed audit. In the event the "Servicing Company" disputes the detailed audit presented, the parties hereto agree to meet and confer to resolve any such dispute. H. In the event that the "Servicing Company" contends that it has been underpaid by the "Client" in accordance with the terms of this contract, it shall present to the "Client" a detailed account showing the basis of such alleged underpayment and the "Client" shall have forty-five (45) days to review said detailed statement. In the event the "Client" disputes the detailed statement presented, the parties hereto agree to meet and confer to resolve any such dispute. I. Both parties agree that the services to be performed under this agreement require good, sufficient and timely communications between the "Servicing Company" and the "Client" and to this end both parties agree to give their full attention to this undertaking. J. The "Client" retains full authority to select legal defense attorneys of the "Client's" choosing. K. This contract is made and entered into in Lubbock County, Texas, and accordingly the law of the State of Texas shall govern this contract and the interpretation of same. -10- L. Venue upon any dispute of this contract shall be in Lubbock County, Texas. IN WITNESS WHEREOF, the "Servicing Company" and the "Client" have caused this contract to be executed by the persons authorized to act in their respective names. THIS 15TH DAY OF AUGUST 1996 l; K CRAWFORD & C MPANY BY: David Langston B.W. Craw TITLE: Mayor, City of Lubbock TITLE: Vice President APPROVED AS TO CONTENT: BY: &d4�� axyj-a� Mary Andre s Managing Di ctor of Human Resources APPROVED AS TO FORM: 9ZOAPAr�:� DUN -11- EXHIBIT A FILE RETENTION AND DESTRUCTION POLICY LIABILITY FILES: Destroy two (2) years after applicable statute of limitations has expired. Exceptions• a. Suits - retain until expiration of appellate process. Then destroy. b. Mental Incompetents - retain indefinitely. c. Infant (Minor) Claims - retain until infant reaches majority plus applicable statute of limitations plus two (2) years. FIRST PARTY CLAIMS, UBROGATION1 ARBITRATION, INCIDENT REPORTS, AND BOND LOSSES: Destroy one (1) year after file closing. Exceptions• a. Suits - retain until expiration of appellate process. Then destroy. b. Prevailing Statute Precludes Destruction in one (1) year. WORKERS' COMPENSATION CLAIMS: Medical Only Claims Excludini Occupational Disease Claims: Destroy six (6) months after applicable statute of limitations has expired. Exceptions: a. Prevailing Statute Precludes Destruction in six (6) months. Other Than Medical Only Claims Excludin Occupational Disease Claims: nestroy one (1) year after applicable statute of limitations has expired. Exc_ptions: A. Formal or Informal Hearing Level Claims - retain until 'expiration of appellate process. Then destroy. b. Prevailing Statute Precludes Destruction in one (1) year. Occupational Disease Claims: Destroy four (4) years after applicable statute of limitations has expired. Exceptions: a. Formal or Informal Hearing Level Claims - retain until expiration of appellate process. Then destroy. b. Prevailing Statute Precludes Destruction in four (4) years. -12- EXHIBIT `B" The "Servicing Company's" settlement authority shall be limited to that authority granted to it by the Risk Manager on a claim by claim basis. The foregoing shall in no manner limit the ability of the "Servicing Company" regarding the following: 1. to make settlement recommendations to the City of Lubbock; 2. to limit "Servicing Company's" ability to make periodic payments for expenses in connection with the defense of a claim as provided by this agreement; 3. to make payments in accordance with the settlement of workers' compensation claims as provided by the laws of the State of Texas. -13- SS/lm gA18766\cntrct96