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HomeMy WebLinkAboutResolution - 2009-R0514 - Purchase Specific & Aggregate Stop Loss Insurance- High Mark Life Insurance Co. - 11_19_2009Resolution No. 2009—RO514 November 19, 2009 Item No. 5.7 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 purchase for and on behalf of the City of Lubbock, specific and aggregate stop loss insurance coverage, by and between the City of Lubbock and High Mark Life Insurance Company pursuant to the terms and conditions attached hereto as Exhibit "A", offering the same benefits as set forth in Exhibit "A" hereto, and in a final form and substance acceptable to the City Manager and City Attorney, for the City's health benefits program; and THAT the City Manager or designee may execute any routine documents and forms associated with said insurance coverage. Passed by the City Council this 19th day of November , 2009. ATTEST: 0, P-� .-� - Rebecca Garza, City Secretary APPROW D AS TO CONTENT: LJ—a-Tfdtcbeson, Director of Risk Management y gsiecdow igh Mark Life Ins Co,res.09 12105/09 TOM MARTIN, MAYOR Resolution No. 2009-RO514 STOP LOSS PROPOSAL FOR City of Lubbock Sales Representative: J. Albert Lucio Broker: No Writing Agent TPA: HCSC - BCBS of Texas (Austin) Provider Network(s): Blues Utilization Review Vendogs): BCBS of Texas Specific Deductible (per Covered Individual) $200,000 $350,000 Lifetime Maximum Specific Benefit $1,800,000 $1,650,000 Covered Benefits Med, Rx Card Med,:1 Pre lum - - Single Rate 1,308 $9.10 $4,85 Family Rate 1,210 $21.34 $13.15 Total Lives 2,518 Estimated Contract Specific Premium $452,690 3267,064 Contract Basis 12115 12115 Commission 0.00% 0.00% •,_ 1.• Covered Benefits Med, Rx Card Med, Rx Card Policy Year Maximum $1,000,000 kw, $1.000,000 Aggregate iFo*rs Composite Medical Factor 2,518 $54016 , _ 7 Composite Rx Card Factor 2,518 $148.19y $164.21 Estimated Contract Attachment Point $20,805,227 Contract Minimum Attachment Point (100%) $20,805,227 Aggregate Corridor 125°% 125°,6 Contract Basis 12115 12/15 Agjrejate Prw#um Composite Rate 2,518 $2.101 $m Estimated Contract Aggregate Premium 2,518 $66,173 $72,518 Commission 0.00% 0.00% Total Combined Estimated Contract Premium $518,863 $339,582 Effective Date: 01/01/2010 Through Date: 12/31/2010 1, LIFE INSURANCE COMPANY Note: This proposal is not complete unless accompanied by the proposal notes, the basis of offer and the exclusions noted on the following pages. Underwriter: DEW (November 9, 2009) 10062646878-2009- Page 1 of 4 STOP LOSS PROPOSAL FOR City of Lubbock PROPOSAL NOTES • The rates and factors in this proposal are firm. You have 30 days to provide a signed proposal. • Organ Transplants are exicluded from covereage under the stop loss. Individual Special Requirements: PROPOSAL ACCEPTANCE rn� LIFE INSURANCE COMPANY Please acknowledge acceptance of the terms in this proposal by returning this proposal no later than 15 days from the proposal effective date. Please also indicate which option is chosen and whether Aggregate is to be included, by checking the appropriate boxes on the previous page. Failure to remit the signed agreement within the same period will result in updated large claim disclosure (and claims) being required for our review. Signature: %�" `- Title: Tom Martin Accepted on the 19th day of November, 20 09 ATTEST: Rebecca Garza, City Secret APPROVED AS TO CONTENT: (:;e-lisa H tcheson, Risk Manager APPROVED AS TO FORM: 1, ' �-'fit' t _'il L1:iS cUb`•.,'�1 �'_ IS !.I ,.,.._''r':•! It;'.,`il I W Lttt IriSU'Z:M-.F '01- P,1: , t° ;;�I'iL,fat� (-'i1. �f l?lic;l CS t7 G:�'/ lC l'ii I iL �T l I; �1?} a ST'1 lar ir- C ;d?7 fl c413;+ , tit*;I:SE::�bAlhs3:-;c As ? : LK: {i t) :ham Sioi) L,),' i c%'.rier. .11-LPi [li'_•'+''I I"If.)4'!;I"P11:E1 Pa e t At STOP LOSS PROPOSAL FOR f Rk � City of Lubbock LIFF IN tf \Nti initials: X-� J date: BASIS OF OFFER Assumptions • Aggregate coverage is only available when purchased with Specific coverage. • This proposal is subject to revision if there is a change in effective or renewal dates, or a change in the plan of benefits. • This proposal is based on the utilization of the Provider Network(s) and the Utilization Review Vendor(s) listed on this proposal. • This proposal assumes a minimum participation level of 75% applies for all eligible enrollees under a contributory plan, and 100% under a non- contributory plan. • This proposal assumes the plan of benefits includes a pre -certification, utilization review and large case management program with a benefit penalty for non-compliance. • This proposal is based on a description of the employee benefit plan(s) provided and approved by HMIG, employee and dependent census data, plus any other information relevant to the underwriting risk. If any of the information was incorrect or changes the risk involved, the rates and factors will be modified, and the specific and aggregate claims will be adjusted accordingly. • The bad debt and charity surcharge portion of the New York Reform Act will be applicable under the stop loss if services are rendered in New York State. Other surcharges, pool charges and/or covered lives assessments will not be covered under the stop loss. • All standard Policy provisions apply. Certain exclusions, limitations and laws of the state where the Policy is issued, may apply. See "Exclusions" for details. • Retirees are included in the stop loss coverage. • This proposal will expire 15 days after the proposed effective date. • Human Organ Transplant benefits are payable in accordance with the underlying plan and subject to the individual lifetime maximum, • Lifetime Maximum Specific Benefit will follow underlying plan, up to the proposed maximums offered within this proposal. • Expenses arising out of any treatment for mental or nervous disorders will follow the underlying plan. • Expenses arising out of any treatment for drug or substance abuse or alcoholism will follow the underlying plan. • The Agent is properly licensed and appointed by HMIG. • The initial rates are guaranteed for the proposed policy period, unless otherwise noted. • There are not more than 5% COBRA participants. Qualifications • Should the number of employees, either in total and/or by single/family mix, change by 10% or more, the premium rates are subject to change. • If the descriptions of the benefits or plan provisions differ from what was initially utilized to underwrite the risk, an updated Plan Document or other acceptable plan description is required within 60 days of the proposed effective date, and the premium rates and aggregate retention factors may be subject to re -rating, retro-active to the effective date. • HIPAA Privacy rules permit the release of Protected Health Information (PHI) for the purpose of evaluating and accepting risk associated with the Plan Sponsor as part of "Health care operations". HMIG will use this information solely for the purpose of evaluating and accepting the risk and will not disclose any PHI collected except to perform this risk evaluation. 11'il•�. .;i'n. DEV, ' C :1�.rnilic r4 e`-, I STOP LOSS PROPOSAL FOR (m, City of Lubbock LIFE I COR ^NY initials: date: EXCLUSIONS • Any amount incurred 1 paid: (1) when the underlying medical plan is not in effect; by a person who is not a plan participant; (2) not specifically covered by the underlying medical plan; or (3) by any plan that has not been identified as included; or (4) that the policyholder is not required to pay in accordance with the terms of the underlying medical plan. • Caused or contributed to by war or an act of war unless a person is required to be in a location where a war or act of war has or may occur as a condition of employment. • For any injury or illness which is eligible for coverage under a workers' compensation or occupational disease policy or agreement, whether or not such policy or agreement is actually in force and whether or not such benefits are received (subject to applicable laws). • Caused or contributed to by a person committing or attempting to commit an assault or felony, participating in an illegal occupation, or actively participating in a violent disorder or riot (does not include being at the scene of a violent disorder or dot while performing his or her official duties). • Treatment received in person, by mail or otherwise outside the U.S. if the purpose of such travel or communication is to obtain treatment. • Expense incurred prior to the initial incurred date, or the date another affiliate 1 class of employees is acquired or established. • Any known medical conditions not accurately Disclosed prior to the effective date, the date another affiliate is acquired, another class of employees established, the date of renewal, or upon request the date a person becomes eligible for benefits through the underlying medical plan. • For drugs, procedures, services, supplies or treatments which are considered experimental or investigational, or which are not medically necessary and appropriate. • For any expenses for benefits payable by another medical plan, which when combined with the benefits payable through the underlying medical plan would cause the total benefits payable to exceed 100% of the person's actual expenses. • Amounts paid for administrative costs, including but not limited to, administrative costs for claim payments, networks, case management fees, in excess of the usual and customary charge, PPO access fees and Prescription Drug administration fees. • For a person's out-of-pocket expense(s), or any amount incurred by a person for the cost of drugs, procedures, services, supplies or treatment in excess of any reimbursement negotiated with, scheduled to be paid or due a provider or facility. • Amounts over fee, reimbursement percentage or other form of payment negotiated with a provider or facility as total reimbursement to the provider or facility. • Excluded claim expenses. • Capitation fees. • For the expense of litigation, extra contractual damages, compensatory damages, or punitive damages. . Lost provider discounts due to untimely payment of claims. CUP' f '1 JVrii'Ijii' �; %II�I'.I' ^['.,lrl r', `,.,,-,ca �iL:�F•S ., . f' 3 }F ti Gf 4, c cc�m y THE SPECIMEN CERTIFICATE/POLICY ON THE FOLLOWING PAGES REFLECTS STANDARD PROVISIONS OF THE HM LIFE INSURANCE COMPANY CONTRACT. THIS SPECIMEN IS PROVIDED FOR ILLUSTRATIVE PURPOSES ONLY. CERTAIN PROVISIONS OF THE ACTUAL CERTIFICATE/POLICY ISSUED MAY VARY, BASED ON REGULATORY REQUIREMENTS APPLICABLE IN THE STATE WHERE THE GROUP POLICY WILL BE ISSUED OR BASED ON CHANGES MUTUALLY AGREED UPON BY THE POLICYHOLDER AND US. HM LIFE INSURANCE COMPANY FIFTH AVENUE PLACE, 120 FIFTH AVENUE, PITTSBURGH, PA 15222-3099 1-800-328-5433 DECLARATION PAGE A. POLICY INFORMATION L Policy Number Specimen 2. Policyholder Specimen 3. Affiliates None 4. Employer Specimen 5. Policy Term lanuarl 1, 2007 through December 31, 2007 6. Type of Coverage 4op.Loss Insurance 7. Covered Underlying Plan Names Name pecimen S. n� Designated TPA ,s Specimen B. SPECIFIC BENEFIT SCHEDULE For all Eligible Claims Ex ses - ospPto which a Special Risk Limitation applies: L Covered Cla* S Bas' Incurred _: Eligible Claims Expenses Incurred from 01/01/2007 through 12/31/2007 and actually Paid 1/Ol/2007 through 12/31/2007. 2. , pe i igible Claims Expenses include: Healt tare � - DerAl ❑ sion -Y"-' Prescription Drug Card a Short Term Disability ❑ Other ❑ 3. Number of Covered Units Single: 0 Family: 0 Composite: 0 HL601-SL DP (905) 12/28/2006 1 Specimen Declaration Page Stop Loss 4. Specific Deductible per Participant $0 per Participant 5. Specific Payable Percentage (in excess of Specific Deductible) 0% 6. Annual Aggregating Specific Loss Fund ❑ Yes ® No 7. Maximum Specific Benefit (per Participant in excess of the Specific Deductible), Per Lifetime $0 8. Specific Terminal Liability Benefit Included ❑ Yes ® No C. AGGREGATE BENEFIT SCHEDULE For all Eligible Claims Expenses except those to which a Special Risk Limitation applies: 1. Covered Claims Basis Incurred & Paid: Eligible Claims Expenses Incurred from 01/01/2007 through 12/31/2007 and actually Paid from 01/01/2007 through 12/31/2007. 2. Aggregate Eligible Claims Expenses include: Health Care Dental ❑ Vision ❑ Prescription Drug Card ❑ Short Term Disabii' Other 3. Number ofwered`Units Single: 0 r,. F 0 CarMpo 0 14 � Aggragate Payable Percentage (excess of Deductible) 100% Aggregate Attachment Point (Corridor) 0% 6. ' Minimum Aggregate Deductible $0 Aggregate Annual Deductible is equal to A, B or C, whichever is greater, where: A = The Aggregate Monthly Deductible Amount for the initial Policy Month multiplied by the number of months applicable to the Paid period for the current Policy Term B = The sum of the Aggregate Monthly Deductible Amount for each Policy Month applicable to the Paid period for the current Policy Term C = The Minimum Aggregate Deductible HL601-SLADP (905) 2 Specimen 12/28/2006 Declaration Page Stop Loss Note: The Aggregate Annual Deductible cannot be finally determined until the end of the Policy Term. 7. Aggregate Monthly Deductible Amount per Covered Unit $0 per Single Covered Unit per Policy Month $0 per Family Covered Unit per Policy Month 8. Maximum Aggregate Eligible Claims Expense per Participant $Q 9. Maximum Aggregate Benefit Per Policy Term $0 10. Monthly Aggregate Accommodation Benefit Included ~ ` Yes ® No 11. Aggregate Terminal Liability Benefit Included ❑ Yes ® No D. PREMIUM Specific Premium per Month Single Employee: $0 Family: $0 Composite: $0 Initial Specific Rate Guarantee Period: 12 Months Aggregate Premium per Month Per Covered riii: $0 E. SPECIAL RISK LIMITATID,s.. Specific ." Disabled / Hospita i�tii, actively at work, activity of daily living, out of h or similar requirements waived with losure ®Yes ❑ No Retir�s"Include ❑ Yes ® No � None firC3ier: Disabled / Hospital Confined, actively at work, activity of daily living, out of hospital, or similar requirements waived with Disclosure ® Yes ❑ No HL601-SLADP (905) 3 Specimen 1=8/2006 Declaration Page Stop Loss Retirees Included Other: HM Life Insurance Company Secretary ❑ Yes ® No None President HL601-SLJDP (905) 4 Specimen 12/28/2006 Declaration Page Stop Loss HM LIFE INSURANCE COMPANY FIFTH AVENUE PLACE, 120 FIFTH AVENUE, PITTSBURGH, PA 15222-3099 1-800-328-5433 POLICY NUMBER NAME OF POLICYHOLDER TYPE OF COVERAGE EFFECTIVE DATE POLICY TERM POLICY DELIVERED IN Specimen Specimen STOP LOSS INSURANCE January 1, 2007 January 1, 2007 through December 31, 2007 Alabama and governed by the laws of that state. HM Life Insurance Company agrees to pay the benefits provided b;y this Policy, in accordance with the provisions of this Policy. The consideration for this Policy is the application of the.R alip .bolder -and the payment by the Policyholder of premiums as provided herein. This Policy provides benefits to the Policyholder wh{ �Eligtble Claims Expenses, which are actually Paid by the Policyholder through the Covered Underlying Plan{s) E,t - d the levels defined in this Policy. The benefits of this Policy are explained in the Declaration Page, GenerV5efinitions, and Benefits provisions of this Policy and are subject to Disclosure, and/or receipt of C 6mv Information, the Exclusions and Limitations and other provisions of this Policy. This Policy will terminate automatically up'bn t e failure of the Policyholder to pay any premium within the Grace Period. 0 Termination of this Policy fo reason other than nonpayment of premium will occur following written notice by the Policyholder or us.' All provisions on thi following pages are a part of this Policy. The definitions of terms apply whenever the terms are used here is Policy. "We", "us", and "our" refer to HM Life Insurance Company. Other defined terms are prin of d with an . ial capital letter. HM Life Insurance Company y 1 Secretary President This is a Non -Participating Plan of Coverage HU01-SL (905) TABLE OF CONTENTS PART 1. BENEFITS........................................................................ 1 PART 2. EXCLUSIONS AND LIMITATIONS .................................................. 2 PART 3. DESIGNATED TPA................................................................ 4 PART 4. CLAIM PROVISIONS ................................................... ..... 5 PART 5. AMENDMENTS TO THE COVERED UNDERLYING PLAN(S) ...........,. .......... 6 PART 6. TERMINATION...............................................�. ...... 6 PART 7. PREMIUMS ................ ............................ ...................... 7 PART S. GENERAL POLICY PROVISIONS .................... ... ...................... 8 PART 9. RECORDS AND REPORTS ........................ .......................... 9 PART 10. LIABILITY AND INDEMNIFICATION ............................................... 10 PART 11. ENTIRE CONTRACT, CHANGES ...... . .:... ....................... . ...... 11 PART 12. INCONTESTABLE CLAUSE ................................................ 11 PART 13. LEGAL ACTIONS ............................................................ 11 PART 14. INSOLVENCY......... ............................................. 11 PART 15. ASSIGNMENT .. , a:... ,«. ......................................................1 11 PART 16. GENERAL DEFI ,S......................................................... 12 Part 1. BENEFITS Unless otherwise indicated in the Covered Claims Basis section(s) in the Specific Benefit Schedule or the Aggregate Benefit Schedule, benefits under this Policy will only be paid by us based on Eligible Claims Expenses through the Covered Underlying Plan(s) which are Incurred after the Effective Date of this Policy and which are actually Paid by the Policyholder during the Policy Term. The Specific Benefit Schedule, Aggregate Benefit Schedule, and Policy Term are shown on the Declaration Page attached to this Policy. A. B. SPECIFIC BENEFIT We will pay to the Policyholder, subject to the terms and conditions of this Policy, thep1lowing Specific Benefits, as shown in the Specific Benefit Schedule, in accordance with the terms I Asettlement mutually agreed upon by the Policyholder and us. The Specific Benefit payable for the Policy Term with respect to a Participof will be dud to the amount of Eligible Claims Expenses which are actually Paid by the Policyhool for that Participant during that Policy Term, minus A + B, where: A = The Specific Deductible for the Participant. B = Any amounts recovered by the Policyholder for Eligible0Claims Expenses which were actually Paid by the Policyholder during the Policy Term fbr- Eligible Claims Expenses which were K... Incurred by that Participant, or any such amounts which'hhe Policyholder is later able to recover through any recovery provision of the d„udlying Piaa(s). We will pay Specific Benefits as they heo to the terms and conditions of this Policy. satisfaction of the Specific Deductible, subject Specific Benefit does not include any amouLWaictually Paid by the Policyholder for the Policy Term for Excluded Claims Expenses. ;. In no event will the Sppa is l� t id by us with respect to Eligible Claims Expenses which are Incurred by any one gartici gn" during the lifetime of that Participant exceed the Maximum Specific Benefit shown in t$ cc' Benefit Schedule. jN AGGREGATE BE -Jbye We willolicyholder, subject to the terms and conditions of this Policy, the following Aggregate Bene ttl, as sthe Aggregate Benefit Schedule, in accordance with the terms of settlement mutually ag; ed upon Policyholder and us. .- e Aggret^e Benefit will be equal to the amount of the Eligible Claims Expenses which arc actually Paid rplicyholder during the Policy Term shown in the Aggregate Benefit Schedule as the Covered Cl-Basis for Aggregate Benefits, minus A + B + C, where: A = The Aggregate Annual Deductible for the Policy Term. B = The amount in excess of the Aggregate Eligible Claims Expense per Participant. C = Any amounts recovered by the Policyholder for Eligible Claims Expenses that were actually Paid by the Policyholder during the Policy Term, or any amounts which the Policyholder is later able to recover through any recovery provision of the Covered Underlying Plan(s). We will pay the Aggregate Benefit at the end of each Policy Term, subject to the terms and conditions of this Policy. BL601-SL (905) 1 Specimen 12/28/2006 Specific & Aggregate Stop Loss The Covered Claims Basis for the Aggregate Benefit during the Policy Term does not include any amount actually Paid by the Policyholder for Excluded Claims Expenses. In no event will the Aggregate Benefit paid by us for the Policy Term exceed the Maximum Aggregate Benefit per Policy Term shown in the Aggregate Benefit Schedule. Part 2, EXCLUSIONS AND LIMITATIONS No Deductible of this Policy will be satisfied and no benefit of this Policy will be paid for: 1. UNDERLYING PLAN NOT IN EFFECT: Any amount actually Paid by the Polic lder for an expense that is Incurred and/or actually Paid when the Covered Underlying Plan(s) is not 2. NOT A PARTICIPANT: Any amount actually Paid by the Policyholder for an expense teat s'Incurred by a person who is not a Participant when the expense is Incurred. 3. NOT COVERED UNDER COVERED UNDERLYING PLAN,,'"Any., amount actually Paid by the Policyholder for an expense that is not specifically covered under thc'terms of the Covered Underlying Plan(s). 4. NOT A COVERED UNDERLYING PLAN: Any amount actu 'd by the Policyholder for an expense that is covered under any employee benefit plan of the Poli . ho r which is not identified as a Covered Underlying Plan on the Declaration Page. X 5. TERMS OF THE COVERED UNDERLY1N fPLAN-f Any amount the Policyholder is not required to pay in accordance with the terms of the Coveredndeying Plan(s). 6. WAR: Any amount actually Paid by the Po1f,4yholder for Eligible Claims Expenses which arise out of or are caused or contributed to by or an act f war. wr. t` WAR means declared or tndecla d u' *hether civil or international, and any substantial armed conflict between organized forte of &,,Military nature. 7. WORK RE *eeme unt actually Paid by the Policyholder through the Covered Underlying Plan(s) for any injury or ilch is eligible for coverage under a workers' compensation or occupational disease pol' rhether or not such policy or agreement is actually in force and whether or not such b slued by the Participant. 8. FFl ONY: AnyAmount actually Paid by the Policyholder for Eligible Claims Expenses for any period ,, aused or cgoibuted to by a Participant committing or attempting to commit an assault, felony, or ici at' m an illegal occupation, or actively participating in a violent disorder or riot. Actively ._ P l3l� � g P Y P P g Y T011C121tadutics. fing does not include being at the scene of a violent disorder or riot while performing his or her 9. FOREIGN MEDICAL CARE: Any amount incurred by a Participant for the cost of drugs, procedures, services, supplies or treatments rendered or received in person, by mail or otherwise outside the United States if the purpose of such travel or communication is to obtain or receive such drug, procedure, service, supply or treatment. 10. PRIOR EXPENSE: An expense Incurred by a Participant: (1) prior to the initial Incurred and Paid Period shown on the Declaration Page attached to this Policy, or (2) if after the Effective Date of this Policy, the Policyholder acquires another Affiliate or establishes another class of employees, eligible for coverage through the Covered Underlying Plan(s). HL601-SL (905) 2 Specimen 12/28/2006 Specific & Aggregate Stop Loss 11. RETIRED: Any amount which is actually Paid by the Policyholder for an expense which is Incurred by a Participant who has retired. 12. NONDISCLOSURE: Any amount which is actually Paid by the Policyholder for an expense which is Incurred by a Participant who: a. Was a Participant at the time of the initial underwriting of this Policy, but whose Known medical conditions were not accurately Disclosed to us at that time by the Applicant, Policyholder or Designated TPA. b. Was a Participant at the end of the Policy Term, but whose Known medical offaitions were not accurately Disclosed to us by the Applicant, Policyholder or Designated=ftTPA at the time this Policy is renewed.,iA _- C. Becomes a Participant after the Effective Date of this Policy'Aut whose _Xhown medical conditions were not accurately Disclosed to us by the Applicant;,Policyholder or Designated TPA before the date the Policyholder acquires another Affiliaa, or establishes another class of employees eligible for coverage through the Covered Urtde`rlying'Plan(s). 13. USUAL AND CUSTOMARY CHARGE: Any amount which-S actually Paid by the Policyholder in excess of the usual and customary charge for the Covered Servias rdefined and/or applied by the Covered Underlying Plan(s). L . 14. EXPERIMENTAL OR INVESTIGATIONAL: Anamount which is actually Paid by the Policyholder for ,ate whi the cost of drugs, procedures, services, suii rtlieatments which are considered experimental or investigational. But only to the extent such drug, procedure, Oe7ice, supply or treatment is considered a Covered Service for which a benefit is payable under the term -'f the Covered Underlying Plan(s). TV ,. 15. NOT MEDICALLY NECES amount which is actually Paid by the Policyholder for the cost of procedures, drugs, treatrratlts, s�ey P'supplies which are not medically necessary and appropriate, as determined by the F an -Drug Administration, the American Medical Association, their successor organization(s), org terally accepted medical compendia. 16. OTHER COVERAG Amount of any expenses for benefits to any Participant with coverage under any other plan when c tbined with the benefits payable by such other plan, would cause the total paid by that, an an a Covered Underlying Plan(s) to exceed 100% of the Participant's actual expenses. 17. A,pMINIS VE COSTS: Any amount which is actually Paid by the Policyholder for administrative -frosts, includ' but not limited to, administrative costs for claim payments, networks, case management V�M in a csss of the usual and customary charge, PPO access fees and Prescription Drug administration 18. ALLOWABLE AMOUNT: Any out-of-pocket expense(s) Paid by a Participant, or any amount Incurred by a Participant for the cost of drugs, procedures, services, supplies or treatment in excess of any reimbursement negotiated with, scheduled to be actually Paid or due a provider or facility by the Covered Underlying Plan(s); or the usual and customary charge for the Covered Service as defined and/or applied by the Covered Underlying Plan(s), whichever is less. 19. EXCESS REIMBURSEMENT: Any amount in excess of the fee, reimbursement percentage or other form of payment negotiated with a provider or facility by the Applicant, Policyholder or Designated TPA as total reimbursement to the provider or facility for the cost of drugs, procedures, services and supplies through the Covered Underlying Plan(s). H1,601-SL (905) 3 Specimen 12/28/2006 Specific & Aggregate Stop Loss 20. CAPITATION FEES: Any amount which is actually Paid by the Policyholder for capitation fees. 21, LITIGATION EXPENSES: Any amount which is actually Paid by the Policyholder for the expense of litigation. 22. DAMAGES: Any amount which is actually Paid by the Policyholder for extra -contractual damages, compensatory damages, or punitive damages. 23. EXCLUDED CLAIMS EXPENSES: Any amount which is actually Paid by the Policyholder for an Excluded Claims Expense. 24. LOST PROVIDER DISCOUNTS: Provider discounts of any kind lost due to untimely payment of claims by the Policyholder or the Policyholder's authorized representative. 25. UNFUNDED CLAIMS: Any amount actually Paid by the Policyholder for Sit Unfunded Claim. Part 3. DESIGNATED TPA A. RESPONSIBILITIES OF THE POLICYHOLDER'S DESIWATED TPA Without waiving any of its rights under this Policy, and without' ,,, ng the Designated TPA a party to this Policy, we agree to recognize the Designated TPA as respects the normal administration of the Policyholder's Covered Underlying Plan(s), subject to ea be following conditions: 1. The Designated TPA must be responsible. on behalf of the Policyholder for auditing, calculating and processing all Eligible Claims Expenses through the Covered Underlying Plan(s) within a reasonable period of time, preparing periodic reports as required by us, and maintaining and making available to ata timesh information as we may reasonably require for proof of payment of Eligibl ,.�alns by the Policyholder. 2, The Designated TPA. Uyill secure and keep renewed, at their expense, all licenses, permits, authorizat"ons or .certificates of authority in the states where the Third Party Administrator conducts t e�business of insurance in accordance with statutory requirements. 3. The>� nated''PA must perform such other duties as may be reasonably required by us inc�u but not limited to, maintaining an accurate record of the Participants covered through the Co fed Underlying Plan(s), 4. The,Designated TPA must make Preferred Provider Organization (PPO) network(s), managed care vendors, centers of excellence and other applicable discount networks appropriate for the rovision of medical care available to the Policyholder. If the Designated TPA does not have a PPO or discount networks, arrangements or vendors available, the Designated TPA must either utilize an outside vendor of their choice to negotiate discounts all non -network or out of network billings, or use a vendor with whom we have an existing business relationship. 5. We will not be responsible for any compensation due the Designated TPA for functions performed by the Designated TPA for the Policyholder in relation to this Policy. 6. This Policy will not be deemed to make us a party to any agreement between the Policyholder and the Designated TPA. HL601-SL (905) 4 Specimen 12/28/2006 Specific & Aggregate Stop Loss W A. B. NOTICE TO POLICYHOLDER AND DESIGNATED TPA For the purpose of any notice required from us under the provisions of this Policy, notice to the Policyholder's Designated TPA will be considered notice to the Policyholder and notice to the Policyholder will be considered notice to the Policyholder's Designated TPA. Part 4. CLAIM PROVISIONS NOTICE OF CLAIM Satisfactory notice of claim must be given to us within 20 days after the occurren%pj commencement of any loss covered by this Policy or as soon thereafter as is reasonably possible. by or on behalf of the Policyholder or the Policyholder's authorized representative, to us or t y of o orized agents, with information sufficient to identify the Policyholder and Participant will e deemed notice to us. The Policyholder or the Policyholder's authorized representative Tust provide written notification to us within 20 days of the earlier of the following dates: k 1. The date the Policyholder is first notified that a Part!Niant,has Incurred Eligible Claims Expenses ---- through the Covered Underlying Plans for a Catastr' y g O ?lp- Claim, Large Claim or Shock Loss. 2. The date the Policyholder is first notified that a Participant"has Incurred Eligible Claims Expenses through the Covered Underlying Plan.50% of the Specific Deductible. Failure to give notice within such time will tit inyglidate or reduce any claim if it is shown not to have been reasonably possible to give such noticean.time and that notice was given as soon as was reasonably possible. The notice to us must include: `yrvt Yam" 1. The identity of or un i' ratifier associated with the Participant. 4 2. A description ihe i1jaeo`r' ss cident and the prognosis. 3. A listing "able Claims Expenses Incurred by or known to the Policyholder to date through the Covere ing Plan(s). TIME LUALTacildW FILING A CLAIM ^may case, �nicAx and no benefits will be paid by us. These limits will not apply during any period when the 4.. "(" older lacked the legal capacity to file a claim. Upon presentation of satisfactory proof of loss the Policyholder represents that all monies necessary to pay for services and supplies have been paid to the Participant or respective providers of medical services or supplies to which the claim for reimbursement under the Policy relates. must provide satisfactory proof of loss to support a claim within 90 days after the of the period for which we are liable or as soon thereafter as reasonably possible and, in one year after the end of that 90 day period. Claims not filed within these time limits will HL601-SL (905) 5 Specimen 12/28/2006 Specific & Aggregate Stop Loss Part 5. AMENDMENTS TO TIRE COVERED UNDERLYING PLAN(S) We reserve the right to approve any substantive change to the Covered Underlying Plan(s). The Policyholder or its authorized representative must furnish us with a copy of each change to the Covered Underlying Plan(s) prior to the effective date of the change. If we do not give our prior written approval of a change to the Covered Underlying Plan(s), then we will have the right to exercise one of the following options by giving written notice to the Policyholder: 1. If we accept the change, we will consider such change approved on the later of the: (/datef the change; or (2) first day of the month following the date we were notified of the change. Paany benefiunder this Policy based on the changes to the Covered Underlying Plan(s), gent on the Policyholder's written acceptance of any necessary adjustment to the premium, 2. We may decline to approve the change and pay benefits under this Policy,_ rf the Underlying Plan(s) had not been changed. Other options may be mutually agreed upon by the Policyholder and us. Part 6. TERMINATIf *-. This Policy and all coverage under this Policy will terminate at 12:01 a.m�Eastern Standard Time on the earliest of the following dates: JQ 1. The day following the end of the last period mA im whemiums were paid. i r 2. The Premium Due Date next following recei s of written notice from the Policyholder that this Policy is to be terminated. 3. The day following the end 0 Terro following 30 days prior written notice to the Policyholder of termination. 4. 5. 6. 30 days prior written notice to the Policyholder that we are planning to 50 Covered Units through the Covered Underlying Plan(s); to accept a change to the Covered Underlying Plan(s); or has refused to accept any necessary adjustment to the premium due to a change in the date of termination of the Covered Underlying Plan(s). The day following the date of cancellation of the administrative agreement between the Policyholder and the Designated TPA, unless the Policyholder has selected another administrator, prior to such cancellation and we have consented to the Policyholder's selection in writing. The day following the date the Policyholder does not pay claims, or make funds available to pay claims, as they become payable under the Covered Underlying Plan(s). HL.601-SL (905) 6 Specimen 12/28/2006 Specific & Aggregate Stop Loss If this Policy terminates prior to the end of the Policy Term, the Covered Claims Basis of this Policy will be limited to Eligible Claims Expenses Incurred and actually Paid prior to 12:01 a.m. Eastern Standard Time on the day following the date this Policy terminates. However, if this Policy terminates prior to the end of the Policy Term, the Aggregate Benefit, if any, will not be pro -rated and the full Minimum Aggregate Deductible will still apply to Eligible Claims Expenses Incurred and actually Paid prior to 12:01 AM Eastern Standard Time on the day following the date this Policy terminates. Part 7. PREMIUMS A. AMOUNT OF PREMIUMS Premium is calculated based upon the number of Covered Units covered by th vere rlying Plan(s) in any given Policy Month. The estimated number of Covered Units for thew'&rstaPolicy nth is shown in the Schedule on the Declaration Page attached to this Policy, based on a estimated initial enrollment. The number of Covered Units for each Policy Month will be determined -in accordance with the definition fsb of a Participant. If the Specific and/or Aggregate Benefit ,,Sbhedule shows that the "Single Employee/Family" method is used, then the total number o 'Swod Employees" and the total number of "Families" is each multiplied by the appropriate rate fortft,x1assification. If the Specific and/or Aggregate Benefit Schedule shows that the "Composite" method�9s used, then the "Composite" total is multiplied by the appropriate rate. The rates for this Policy are set by us. The Specific Benefit Schedule, if any, and the Aggregate Benefit Schedule, if a ' , - -k Declaration Page attached to this Policy. B. CHANGES IN PREMIUM RATES We reserve the right to change any rate or Pycentage used in determining the monthly premium. The change may occur on one of tMD, ng does: gi1. On any Premiu�lutiie number of Covered Units covered by the Covered Underlying Plan(s) fluc%Afts b ore than 10% from the number on the Effective Date of this Policy or the number oq�,_d4oOof the last Policy Anniversary, whichever is the later date. 2. Retroactively �-beginning of the Policy Term, if we determine that claim payments are not Ithe e in acbordance with the terms and conditions of the Covered Underlying Plan(s). 3. r of: (1) the effective date of any change in the Covered Underlying Plan(s) approved by w irst day of the month following the date we were notified of such change. 4 -�' . �- 46roactively to the effective date of a signed administrative agreement between the Policyholder ,r and a new Designated TPA provided we have consented to the Policyholder's selection in writing. On any Policy Anniversary. 6. At the end of any Policy Term. We will give the Policyholder 30 days prior written notice of any change in any rate or percentage used in determining the monthly premium. HL601-SL (905) 7 Specimen 12/28/2006 Specific & Aggregate Stop Loss C. PAYMENT OF PREMIUMS All premiums are due on the applicable Premium Due Date. Each premium is payable by the Policyholder on or before the Premium Due Date direct to us at our Home Office. The payment of each premium as it becomes due will maintain this Policy in force through the date immediately preceding the next Premium Due Date. D. GRACE PERIOD A Grace Period of 31 days will be allowed for the payment of each premium after the first premium, Should a premium which is otherwise due not be paid during the Grace Period, this Policy will automatically terminate on the day following the end of the last period for whi.ch-piiemiums were paid at 12:01 AM Eastern Standard Time, without further notice to the Policyholder., Our Milt -will be limited to Eligible Claims Expenses that are Incurred and actually Paid by the Policyholder p`ripr`to the date of termination. Part 8. GENERAL POLICY PROVISIONS A. HOLD HARMLESS 1. The Policyholder agrees to hold us harmless from any legal expenses incurred or judgement(s) awarded arising out of any dispute invply�XAM titt.or former Participant in the Policyholder's �. Covered Underlying Plan(s), providda ac Mega e.xpenses or judgments were not incurred as a result of our sole negligence or integttionaalrwrongful acts. 2. If we are notified that we have been V6ned, or are likely to be named, as a defendant in any action involving a current or fgriler Parti plant in the Policyholder's Covered Underlying Plan(s), we will give the Policyhelgkii ritten no lee of the dispute within a reasonable time. We will make all probative materi. availj=the Policyholder upon written request from the Policyholder. We will cooperaW, Vvith Jfie' Policyholder in matters pertaining to the dispute. However, such cooperatio 'th ate Policyholder will not waive our right to solely defend or settle any such action in a M ner we deem prudent. 3. The—Ewi0holdeWgrees to hold us harmless from any state premium taxes incurred with respect to to or by the Policyholder through the Covered Underlying Plan(s). Taxes incurred with respect premiums paid for this Policy will be our responsibility. B. NOTICE OFBJECTION o!b�gption, notice of legal action, or complaint received on a claim processed by the Policyholder or the lekipated TPA, and on which it reasonably appears a benefit will be payable to the Policyholder under this Policy, must be brought to the immediate attention of our claims department. C. POLICY NONPARTICIPATING This Policy is nonparticipating and does not share in our surplus earnings. D. OFFSET We have the right to offset any benefits payable to the Policyholder under this Policy against premiums due and unpaid by the Policyholder, but this right will not prevent the termination of this Policy for the nonpayment of premium pursuant to the terms of Part 7. HL601-SL (905) 8 Specimen 12/28/2006 Specific & Aggregate Stop Loss E. RECOVERY The Policyholder must prosecute any and all valid claims that the Policyholder may have against third parties arising out of any occurrence resulting in a payment for Eligible Claims Expenses by the Policyholder and must account to us for any amounts recovered. At that time we may, at our option, bring legal action to recover from the third party the amount of any benefits we paid to the Policyholder in connection with the payment of Eligible Claims Expenses caused by the third party's negligence or wrongdoing. The Policyholder will be required to provide uWAth any legal instruments, documents, or papers we may need to exercise our right to recover and the Policyholder is prohibited from doing anything to prejudice our right to recover payments from the third party. F. REIMBURSEMENT In the event that the Policyholder recovers from a third party with respect to any Eligible Claims Expenses for which benefits were paid under this Policy, the Policyholder must repay us. The full amount of any and all such funds recovered must be returned to us first before any Deductible under this Policy will be satisfied. No part of any Eligible Claims Expenses which is actually Paid by the Policyholder and for which the Policyholder has been reimbursed by a third party gay be used to meet any Deductible under this Policy. This provision will survive the termination of this Iicy. G. ARBITRATION In the event of a dispute between the parties 1,oTIMBOWb whether coverage is provided under this Policy of Insurance for a claim made by or anst the Policyholder, both parties may, by mutual consent, agree in writing to arbitration of the disagree"ient. If both parties agree to arbitrate, each party 1 select an arbitrator. The two arbitrators will select a third arbitrator. if they cannot agre thin 30 �s upon a third arbitrator, both parties must request that selection of a third arbitra;be a._a judge of a court having jurisdiction. Unless both parties agree othe wise, arbitration will take place in the county or parish in which the address shown on the DectgA 'gnage, attached to this Policy, is located. Local rules of law as toacedure and evidence will apply. A decision'" to by any two will be binding. Each party will: 40- 1. Pay tlt xpenses it incurs; and Z.. Bpr the expenses of the third arbitrator equally. Part 9. RECORDS AND REPORTS A. REPORTING The Policyholder or the Policyholder authorized representative must submit on a timely basis all proofs, reports, and supporting documents requested by us, including, but not limited to, a monthly summary of all Eligible Claims Expenses which were processed by the Policyholder or the Designated TPA Clerical error, whether by the Policyholder or by us, in keeping any records pertaining to the coverage, will not invalidate coverage otherwise validly in force nor continue coverage otherwise validly terminated. HL601-SL (905) 9 Specimen 12/28/2006 Specific & Aggregate Stop Loss B. C. 0 AUDITS We have the right to inspect and audit all records and procedures of the Policyholder and the Designated TPA. We have the right to require, upon request, proof satisfactory to us that payment has been made to the Participant or the provider of the Covered Services that are the basis for any claim by the Policyholder under this Policy. UNDERWRITING INFORMATION We have relied upon the underwriting information and Claim Information provided and Disclosed by the Applicant, Policyholder or the Policyholder's Designated TPA: 1. To issue this Policy; 2. To renew this Policy; and 3. After the Effective Date of this Policy to accept: a. Employees of another Affiliate as Participanoor Aff sR _�. b. Members of another employee class as Pariti4pants. Should subsequent information become Known which, if Known prior to: e j N- 1. Issuance of this Policy, would affec k . �.rttte tibles, or the terms and conditions of this Policy, we will have the right to rev the panes, DRdeductibles, and the terms and conditions of this Policy retroactive to the effectivof this Policy, by providing written notice to the Policyholder. 2. Renewal of this Poli ould affedf�the rates, Deductibles, or the terms and conditions of this Policy, we will h the -evise the rates, Deductibles, and the terms and conditions of this «, Policy retroacve to lie to for the current Plan Year, by providing written notice to the Policyhold 3. After the E Date of this Policy should subsequent information become Known which, if ^K. or t date we accept: (1) any employee, or dependent of such employee, of another a Participant; or (2) any member of another employee class as a Participant would tes, Deductibles, or other terms and conditions of this Policy we will have the right to revise the rates, Deductibles, and the terms and conditions of this Policy retroactive to the date of ffilour�ceptance, by providing written notice to the Policyholder. t. Part 10. LIABILITY AND INDEMNIFICATION LIABILITY We will have neither the right nor the obligation under this Policy to directly pay any Participant or provider of Covered Services for any benefit that the Policyholder has agreed to provide through the terms of the Covered Underlying Plan(s). Our sole liability under this Policy is to the Policyholder. HL601-SL (905) 10 Specimen 12/2$12006 Specific & Aggregate Stop Loss B. INDEMNIFICATION If we suffer any liability, loss or expense due to a misstatement or failure to Disclose any Known or requested information, or failure to provide any additional information requested by us on a Participant or a person named in a Disclosure Statement, or for whom we have requested Claim Information, the Policyholder agrees to indemnify us up to the amount of such liability, loss or expense, and all costs associated with such liability, loss or expense. Part 11. ENTIRE CONTRACT, CHANGES This Policy, the Application, a copy of which is attached to this Policy, as well as the DWI,' a Statement(s) or Disclosure Form(s), Declaration Page and attached documents, if any, constitute the entite.conttjof insurance. No change in this Policy will be valid unless it is approved in writing by one of our exeive office delivered to the Policyholder for attachment to this Policy. This approval must be shown on oj;attached to this Policy. No agent or Designated TPA has authority to change this Policy or to waive any of its p visions. Part 12. INCONTESTABLELiSE In the absence of fraud, any statement made by the Applicant, Ate, Employer or Policyholder is a representation and not a warranty. No statement made by the Applicant, Affiliate, Employer or Policyholder affecting this Policy will be used to deny a claim or to deny. Amwalid W of this Policy unless contained in a written instrument signed by the Applicant, Affiliate, Emplo , o� r Policyholder and a copy of the written instrument has been given to the Applicant, Affiliate, Employer or Pcyhdl"der. 13. LEGAL ACTIONS ,,�� s Y No action at law or in equity may k6%rou -. ver under this Policy until 60 days after written proof of loss has been furnished to us. No such.Adfion rp# be brought more than three years after the time within which proof of loss is required to be furnished. ,_ . I Part 14. INSOLVENCY The insolve , bankrup ", financial impairment, receivership, voluntary plan of arrangement with creditors, or dissoluti of the Poli older or the Policyholder's Designated TPA will not impose upon us any liability other than t b. ty de d in this Policy. Part 15. ASSIGNMENT The Policyholder's rights and benefits under this Policy cannot be assigned. AI.601-SL (905) 11 Specimen 12/28/2006 Specific & Aggregate Stop Loss Part 16. GENERAL DEFINITIONS AFFILIATE means a company, division, location or class of employees within such company, location or division while subsidiary to affiliated with or controlled by the Policyholder. This term may include the Employer. AGENT when referring to the Applicant or Policyholder, means the Applicant's or the Policyholder's representative, including but not limited to the agent or broker of record, or Designated TPA. AGGREGATE ANNUAL DEDUCTIBLE means an amount that the total of the Eligible Claims Expenses which are actually Paid by the Policyholder during the Policy Term for all Participants must exceed Wore Aggregate Benefits become payable to the Policyholder. This amount, which cannot be finally determined until the end of the Policy Term, is based on the number of Covered Units reported by the Policyholder, or the Policyholder's authorized representative, used to determine the Aggregate Monthly Deductible Amount or the )Minimum Aggregate Deductible. AGGREGATE ATTACHMENT POINT (Corridor) means the percentagW of anticipated Eligible Claims Expenses which the Policyholder must pay before Aggregate Benefits will becb%e p#yable to the Policyholder. The Aggregate Attachment Point, as shown in the Aggregate Benefit Schedule, is to determine the amount of the Aggregate Monthly Deductible Amount Per Participant. The Aggregate enefit Schedule is shown on the Declaration Page attached to this Policy. AGGREGATE BENEFIT means a type of benefit payment provided u jhhis Policy to the Policyholder when Eligible Claims Expenses which are actually Paid by the Policyholder through the Covered Underlying Plan(s) for all Participants combined exceed the Aggregate Annual 'l: iiu d!,Own in the Aggregate Benefit Schedule. The Aggregate Benefit Schedule is shown on the Declaratu"jn Pape attached to this Policy. AGGREGATE ELIGIBLE CLAIMS EXPENSE m'"the maximum dollar amount of Eligible Claims Expenses that are actually Paid by the Policyholder for a Participant during the Policy Term which can be used either to satisfy the Aggregate Deductibles or included ' calculation of the Aggregate Benefit for that Policy Term, as shown in the Aggregate Benefit Schedule. Th ggrtenefit Schedule is shown on the Declaration Page attached to this Policy. W r I AGGREGATE MONTHL, <� I�CI'IBLE AMOUNT means, for each Policy Month in the Incurred and Paid period shown on the Declarat e, A multiplied by B, where: A = The Aggr olithly Deductible Amount per Covered Unit B = The dumber o ", overed Units as reported by the Policyholder or the Policyholder's authorized r yesentative a�0le start of that Policy Month. AGGMGATE MONTHLY DEDUCTIBLE AMOUNT PER COVERED UNIT means the monthly dollar amoun yT; r.�over;cOnits which is used to calculate the Aggregate Annual Deductible and the Minimum Aggregate Annual" kyle. The Aggregate Monthly Deductible Amount Per Covered Unit is shown in the Aggregate Benefit Schedule. The Aggregate Benefit Schedule is shown on the Declaration Page attached to this Policy. AGGREGATE PAYABLE PERCENTAGE means the percentage of the Aggregate Benefit that will be paid when Eligible Claims Expenses, which are actually Paid by the Policyholder through the Covered Underlying Plan(s), exceed the Aggregate Attachment Point (Corridor). APPLICANT means the Proposed Insured, Proposed Policyholder, or any other entity that has contracted with us to provide Stop Loss coverage. APPLICATION means the written request of an entity through its duly authorized representative(s) for insurance under this Policy on a form acceptable to us. HL601-SL (905) 12 Specimen 12/28/2006 Specific & Aggregate Stop Loss CATASTROPHIC CLAIM means any Known claim for a Covered Claim Expense under a Covered Underlying Plan(s) or another employee benefit plan providing hospital, surgical or medical benefits administered by the Applicant, Affiliate, Employer, Policyholder or Designated TPA Incurred and/or actually Paid, or expected to be Incurred by a Participant that may reasonably be assumed will exceed 50% of Specific Deductible and/or 10% of the Maximum Aggregate Eligible Claim Expense per Participant, in this or the next Plan Year. CLAIM INFORMATION means to provide Complete Details following a Diligent Review of the data requested by us in connection with the application for, or renewal of, this Policy on any on any claim incurred, paid or pended prior to the Effective Date of this Policy including but not limited to Catastrophic Claims and Shock Losses. COMPLETE DETAILS means detailed information including, but not limited to the Participant's name and social security number, date of birth, diagnosis, prognosis (unless prognosis cannot be obtained due. to reasons beyond the Applicant's, Affiliate's, Employer's, Policyholder's, or their authorized representative's control) and provider name, on any Participant covered by, or eligible for coverage, under a Covered UnderlyW Plan or another employee benefit plan providing hospital, surgical or medical benefits administered by the Applicant, Affiliate, Employer, Policyholder or Designated TPA. For purposes of privacy, a unique identifier m1e used to identify the Participant in lieu of the person's name, social security number and date of birth. COVERED CLAIMS BASIS means the basis on which Eligible Clan 'Ex�enses which are Incurred through the Covered Underlying Plan(s) by a Participant qualify under this Policq}� ,applied to satisfy the Deductibles of this Policy and for payment of benefits under this Policy. The Covered `° Basis shown in the Specific Benefit Schedule and the Aggregate Benefit Schedule establishes the period durin hich an Eligible Claims Expense must be Incurred and/or actually Paid and the period during which it must be actually Paid by the Policyholder. The Specific Benefit Schedule and the Aggregate Benefit SoCule n on the Declaration Page attached to this Policy. COVERED SERVICE means a service for which th—articipant has Incurred an Eligible Claims Expense and for which benefits are payable through the C ered Un ding Plan(s). This does not include any service excluded under Special Risk Limitations on the � "tion Page attached to this Policy. COVERED UNDERLYING PLAN}(S)e`an cUnderlying Plan(s) which are identified in Policy Information on the Declaration Page attachedt-to t ' olicy. This does not include any plan excluded under Special Risk Limitations on the Declaratttached to this Policy. COVERED UNIT(S) means vered Unit composed of one or more Participants, as shown in the Policy Information on th , tion t[ge attached to this Policy. A Covered Unit can be composed of a Single Employee, the mily a employee, or the Composite of the employee and family, as shown in the Policy Information a numb Hof Covered Units is used to calculate the premium due each month. The estimated number 'Covered U " is for the first Policy Month is shown in the Policy Information on the Declaration Page attar el; d t� this Polipyt' DEDUCTjBLE(S) means the Specific Deductible(s) or Aggregate Deductible, as shown in the Specific Benefit Schedule orVie Aggregate Benefit Schedule. The Specific Benefit Schedule, if any, and the Aggregate Benefit Schedule, if any, are shown on the Declaration Page attached to this Policy. DESIGNATED TPA means the third party administrator designated by the Applicant, Affiliate, Employer or Policyholder and recognized by us, as described in this Policy. DILIGENT REVIEW means a complete review by the Applicant, Policyholder or Designated TPA of the underlying health plan prior to Disclosure, or the initial underwriting, Effective Date or renewal of this Policy for Known potential large claimants. A claimant is Known if prior to, or at the time Disclosure is requested the Applicant or Policyholder had actual information about the claim, or could have reasonably been assumed to have had such information, had they conducted a Diligent Review. HL601-SL (905) 13 Specimen 12/28/2006 Specific & Aggregate Stop Loss DISCLOSURE OR DISCLOSED means to provide Complete Details following a Diligent Review, and to provide us with all documentation requested including but not limited to the information requested on the Disclosure Form or Disclosure Statement, in connection with the quote/proposal or a renewal offer, census information and Claim information within the time period(s) specified by us in writing, prior to: (1) the initial underwriting of this Policy; (2) the Effective Date of this Policy; (3) the date an Affiliate is acquired, or another class of employees established; or (4) the date of Renewal following the end of any Policy Term. DISCLOSURE FORM OR DISCLOSURE STATEMENT means the documentation submitted by the Applicant, Policyholder, Agent or Designated TPA following a Diligent Review that provides information, upon which we will rely, in part, to issue or renew the Policy, or to accept additional risk under the Policy at any tiri,c daring the current Plan Year EFFECTIVE DATE means the date shown on the cover page of this Policy or the Declaration Page attached to this Policy. ELIGIBLE CLAIMS EXPENSE(S) means expenses which are Incurred by a Participant through the Covered Underlying Plan(s) and for which benefits have been actually Paid by the P' jjkyho r in accordance with the terms of the Covered. Underlying Plan(s). Eligible Claims Expenses which are coverA under the terms of the Covered Underlying Plans), actually Paid by the Policyholder, and not exclu d under the terms of this Policy can be used either to satisfy the Deductible(s) of this Policy or included in the alculation of the benefits payable under this Policy. This does not include any Excluded Claims Expenses in Special Limitations on the Declaration Page attached to this Policy. EMPLOYER means the entity shown on the Declara0611?21gt�jtf�clted to this Policy. EXCLUDED CLAIMS EXPENSES means expense t,Vbp h are Incurred by a Participant for services, supplies and treatment for, or related to, the condition, or resultind'Iffrnplications, of an injury or sickness described in Special Risk Limitations in the Declaration Page attached tounlsPolicy. INCURRED means an Eligible Claims Expense is Incurred on the date the Covered Service is received by the Participant. 41 INDIVIDUAL SPECIFICNr" TIBLE means the separate Specific Deductible, if any, shown in Special Risk Limitations for certain Partio are identified by name, which must be satisfied prior to any Specific Benefit becoming payable u with respect to those Participants. Special Risk Limitations is shown on the Declaration Pag� afc this Policy. KNOWN means infor tton affecting the administration or underwriting of this Policy, which can be reasonably assume�fthat the App�i'�Ca�`nt, Affiliate, Employer, Policyholder, or Designated TPA had knowledge of prior to, or at the tirf„ requ_st for Disclosure or Claim Information. M&VWIWGGREGATE BENEFIT PER POLICY TERM means the maximum dollar amount of the Aggregate Benefit which will be paid by us to the Policyholder for any Policy Term, as shown in the Aggregate Benefit Schedule, The Aggregate Benefit Schedule is shown on the Declaration Page attached to this Policy. MAXIMUM SPECIFIC BENEFIT means the maximum dollar amount of the Specific Benefits which will be paid by us to the Policyholder with respect to Eligible Claims Expenses which are Incurred by any one Participant during the lifetime of that Participant, as shown in the Specific Benefit Schedule. The Specific Benefit Schedule is shown on the Declaration Page attached to this Policy. MINIMUM AGGREGATE DEDUCTIBLE means the dollar amount shown in the Aggregate Benefit Schedule on the Declaration Page attached to this Policy. HL601-SL (905) 14 Specimen 12/28/2006 Specific do Aggregate Stop Loss PAID means an Eligible Claims Expense is actually Paid by the Applicant, Affiliate, Employer, or Policyholder or their authorized representative on or after the date when funds are disbursed to the Participant who Incurred the Eligible Claims Expense, or to the provider of the Covered Service by the Applicant, Affiliate, Employer, Policyholder, or their authorized representative. A claim will be deemed actually Paid on the date that the Applicant, Affiliate, Employer, Policyholder or their authorized representative directly tenders payment by mailing or otherwise delivering a draft or check, provided that the account upon which the payment is drawn contains, and continues to contain, sufficient funds to permit the check or draft to be honored, PARTICIPANT or PARTICIPANTS means a person who is an employee, associate or member of an Applicant, Affiliate, or the Employer or Policyholder, and the dependents of such persons who are covered, or who become eligible for coverage, through a Covered Underlying Plan or another employee benefit plaoviding hospital, surgical or medical benefits administered by the Applicant, Affiliate, Employer or Policy4lder or their designated representative. POLICY means this contract between the Policyholder and us with respect to Stop Loss Insurance. POLICY ANNIVERSARY means each anniversary of the Effective Date of this Policy, unless changed by agreement between the Policyholder and us. POLICY MONTH means successive intervals of time, while this P�cy is in effect, determined on a monthly basis starting on the Effective Date of this Policy. Each new interval will bdW on a day that corresponds to the Effective Date of this Policy. If there is no such day in any applicable month, thei�o last day of the month will be used. POLICY TERM means the period from the: 1. Effective Date of this Policy through the enol pf th,'period of time, shown in the Covered Claims Basis section of the Specific Benefit Schedule or tl 4ggregate Benefit Schedule; or 2. Policy Anniversary through the end of the period of time, shown in the Covered Claims Basis section of the Specific Benefit Schedule or thSAUregate l efit Schedule. The Specific Benefit Schedule, if an e Agregate Benefit Schedule, if any, is shown on the Declaration Page attached to this Policy. Each Poli'IerraftetwAfie initial Policy Term will begin on the Policy Anniversary. The initial Policy Term will begin pn the F#ective Date of this Policy. POLICYHOLDER means i n(ty shown on the cover page of this Policy and on the Declaration Page attached to this Policy. �~ PREMIUM DUA DAT)eans the Effective Date of this Policy and the first day of each following Policy Month. l�L PROPOSE "INSURED }means the entity that signed our Disclosure Statement. PROP $JED POLICYHOLDER means the Proposed Insured. SHOCK•i OR SHOCK LOSS means any loss that is reasonably likely to result in a potentially Catastrophic Claim, or an3rather loss due to the nature of the injury, illness or diagnosis that the Applicant, Affiliate, Employer, Policyholder or Designated TPA reasonably assumes will result in a significant medical expense in this or the next Plan Year, SPECIAL RISK LIMITATION means any modification of the terms or conditions of the Aggregate Benefit Schedule or the Specific Benefit Schedule. Special Risk Limitations are shown on the Declaration Page attached to this Policy. SPECIFIC BENEFIT means a type of benefit provided under this Policy to the Policyholder when Eligible Claims Expenses which are actually Paid by the Policyholder through the Covered Underlying Plan(s) for a Participant, exceed the Specific Deductible. HL601-SL (905) 1s Specimen 12/28/2006 Specific & Aggregate Stop Loss SPECIFIC DEDUCTIBLE means the dollar amount(s) shown in the Specific Benefit Schedule as the Specific Deductible which must be satisfied prior to any Specific Benefit becoming payable under this Policy. The Specific Benefit Schedule is shown on the Declaration Page attached to this Policy. SPECIFIC PAYABLE PERCENTAGE means the percentage of the Specific Benefit that will be paid when Eligible Claims Expenses, which are actually Paid by the Policyholder through the Covered Underlying Plan(s) for a Participant, exceed the Specific Deductible. STOP LOSS INSURANCE means the coverage provided under this Policy, which provides benefits to the Policyholder when Eligible Claims Expenses which are actually Paid by the Policyholder through the Covered Underlying Plan(s) exceed the levels defined in this Policy. UNDERLYING PLAN(S) means the employee benefit plans of the Applicant or Policyholder which provide the benefits identified on the Declaration Page attached to this Policy for the Applicant's, Affiliate's,-Hmployer's or Policyholder's employees, associates or members and their dependents. This PQbcy insures the Policyholder for excess losses through the employee benefit plans identified on the Declaration Page attached to this Policy as Covered Underlying Plan(s). This term does not include any employee beie$t plan`bf the Policyholder that is not identified on the Declaration Page as a Covered Underlying Plan(s). ° r UNFUNDED CLAIM(S) means any claim payable by the Applicant; Affil ate, Employer, Policyholder, or their authorized representative to a Participant or a provider through a Co'---" nderlying Plan drawn on an account funded by the Applicant, Affiliate, Employer, or Policyholder that d of contain, or continue to contain, sufficient funds to permit the check or draft to be honored. HL601-SL (905) 16 Specimen 12/28/2006 Specific & Aggregate Stop Loss