HomeMy WebLinkAbout117-07 RESOLUTIONRESOLUTION NO. 117-07
A RESOLUTION APPROVING A MEMORANDUM OF AGREEMENT
WITH RELIANCE STANDARD FOR EMPLOYEE LIFE AND LONG
TERM DISABILITY INSURANCE COVERAGE
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF
FAYETTEVILLE, ARKANSAS:
Section 1. That the City Council of the City of Fayetteviile. Arkansas hereby approves a
Memorandum of Agreement with Reliance Standard for employee Life and Long Term
Disability insurance coverage. A copy of the Memorandum of Agreement, marked Exhibit A. is
attached hereto and made a part hereof. ,o`,�RKITR ,,,�
re • r:
:FAYETTEVILLE : ii
o, yING oini'oNj1G0 '
By: � 1 . // • / Bv. 1 .®,uta Gz. �rykt`
DA GOODY. Mayor / SO ' A E. SMITH, City CI et
PASSED AND APPROVED this 19th day of June. 2007.
APPROVED:
ATTEST:
MEMORANDUM OF AGREEMENT
This agreement is made on the ni day of June 2007, by and between Reliance Standard
Life Insurance Company ("RSL") and City of Fayetteville. ("Policyholder").
WHEREAS, Policyholder holds Group Policy Number GL -141373 (the "Policy"), a group
life policy issued by RSL effective as of November 1, 2006; and
WHEREAS, Clyde Randall (the `Employee") was an Employee of the Policyholder, and who
died on December 31, 2006; and
WHEREAS, the Employee was not actively at work at the time the Policy became effective;
and
WHEREAS, the Employee did not retum to work for one full day prior to the date of his
death; and
WHEREAS, the Employee was not eligible for benefits under the terms of the Policy; and
WHEREAS, the Policyholder is seeking payment to the Employee's beneficiary in the
amount of $70,000.00, even though no such benefit is payable under the terms of the Policy
NOW THEREFORE, in consideration of the mutual covenants and promises contained
herein, RSL and Policyholder do hereby agree as follows:
1. RSL shall pay to the Employee's beneficiary the sum of $70,000.00. The
payment check may bear the legend "extra contractual payment".
2. The Policyholder will ensure that the existing Policy remain in force with RSL at
the current rates until the renewal date, November 1, 2009 (the "Initial Policy
Period")
3. The Policyholder shall thereafter renew the Policy for an additional term of either
one or two years, at the Policyholder's option, (the "Renewal Term") at the
applicable rate determined by actuarially reasonable underwriting guidelines and
the experience during the Initial Policy period. The renewed Policy shall remain
in effect through the Renewal Term.
4. In the event that Policyholder breaches any term of this agreement, including but
not limited to the obligation to pay premiums dunng the Initial Policy Period and
the Renewal Term, Policyholder shall reimburse RSL the sum of $70,000.00,
within 15 days of Policy termination.
1
•
5. Policyholder shall be responsible for any legal fees and costs incurred by RSL in
recovering the $70,000.00 payment.
6. It is agreed and understood that any payments made pursuant to this Agreement
by RSL shall be made as an accommodation to Policyholder, and shall not
constitute a waiver of any of the Policy provisions or defenses available to RSL
under the Policy, nor shall any changes constitute an admission of liability on the
part of RSL under the Policy.
7. It is agreed and understood that RSL makes no representation as to the nature of
any payments for federal or state income tax purposes.
8. Policyholder hereby releases and forever discharges RSL, its predecessors and
successors and assigns, agents, employees, officers, directors, consultants and any
other person whatsoever from all claims, demands, damages, liabilities, expenses,
damages and causes of action of any kind, with respect to any obligation under
the Policy on the life of Clyde Randall.
Policyholder agrees to indemnify RSL from any and all claims whatsoever
asserted against RSL by any persons, which arise out of the payment(s) provided
for in this Agreement.
10. This agreement constitutes the entire agreement between RSL and Policyholder
with regard to the payment of any benefits for or on behalf of Employee as set
forth herein, and supersedes any prior oral or written agreements between the
parties relating to the payment of benefits for or on behalf of Employee
11. This agreement is governed by the laws of the State in which the Policy was
issued. No changes to this agreement shall be valid or binding unless in writing
and jointly signed by authorized representatives of both RSL and Policyholder.
- 2 -
•
IN WITNESS WHEREOF, Intending to be legally bound hereby, the parties have hereunto
affixed their hands and seals on the dates set forth below.
RELIANCE STANDARD LIFE
INSURANCE COMPANY
By:
Authorized Representative
Ckq. (es pang -O
V P- SQcreAttr y
Panted Name and Title
DATE: G �1`1 el
-3-
CITY OF FAYETTEVILLE
By:
Aute srized Representat'
Printed Name and
DATE. i'/l /07
•
•
•
•
•
Missy Leflar
Submitted By
City of Fayetteville Staff Review Form
City Council Agenda Items
and
Contracts, Leases or Agreements
6/5/2007
City Council Meeting Date
Agenda Items Only
Human Resources
Division
Action Required:
flq(07
(07
I/7
Rd
/Plitt SA
7 iiLt lr'5aranCe
Co
Operations
Department
Staff requests approval of an addendum to the City's present contract with Reliance Standard Life Insurance
company for Life and LTD Disability Insurance.
N/A
Cost of this request
Various
Account Number
Project Number
Budgeted Item
X
176,676.00
Category / Project Budget
70,876.00
Funds Used to Date
105,800.00
Remaining Balance
Budget Adjustment Attached
Personnel Services
Program Category / Project Name
Various
Program / Project Category Name
Various
Fund Name
t\(-A,frki
5- (7- o7
partmen Director Date
City Attorney /
'per um
Finance and Internal Service Director
S/zz107
latere
5-22-67
Date
Mayor
Comments:
ZZ
Date
Previous Ordinance or Resolution #
Original Contract Date:
Original Contract Number:
Received in
Clerk's Offic
Received in
Mayor's Office
Revised April 16, 2007
0-M1 1 Pi�ndwz, Ain Cent- j2kd t% 4//f/7
a e evl le
Y ARKANSAS
CITY COUNCIL AGENDA MEMO: June 5, 2007 Meeting
TO:
THRU:
FROM:
DATE.
SUBJECT:
Mayor Dan Goody and the City Council
Gary Dumas, Operations Directo
Missy Leflar, Human Resources Division Manager
May 17, 2007
Renewal of City's Life and Long Term Disability Insurance
Recommendation
Staff recommends approval of an addendum to the City's present contract with Reliance
Standard Life Insurance Company. The addendum would extend the present one year contract,
set to expire in November, to include a mutual option to renew each of the following two
Novembers. A copy of the addendum and accompanying contract is attached.
Background
Last fall the City changed its Life as well as Long Term Disability insurance coverage for
employees from USAble over to Reliance Standard Life Insurance Company. The present
contract expires November 1, 2007, subject to a month to month renewal. There is money in
the 2007 budget to renew in November, and by prior agreement Reliance guarantees the same
premium rates if the City renews in November, 2007.
Discussion
A change from carrier to carrier creates potential policy coverage issues and employee and staff
sign-up and conversion issues. Coverage changes can thus be advisable when advantageous
from the standpoint of cost or service issues, but generally not otherwise. This particular
changeover was done to resolve a cost issue; However, it created a coverage issue that
became apparent this winter when an employee was out on health related leave during the
change over and then passed away. Due to the unfortunate timing of the unforeseen illness,
the employee was neither covered by the new life insurance policy nor the old one.
Reliance has agreed to pay the employee's widow as if the employee had been covered,
provided the City agrees to a two year mutual option to renew (November 1, 2007 and
November 1, 2008) subject to the following conditions: 1) That Reliance continue its present
good level of customer service to the City; 2) That Reliance guarantee the same premiums at
the first renewal and "fair and reasonable" premiums based on industry actuarial and experience
standards at the second renewal; 3) That the City's budget allows for the expense; and 4)
That in the event the City does not exercise both renewals it pay Reliance back the amount
Reliance paid the deceased employee's widow (approximately $70,000).
Budget Impact
The Reliance renewal for 2007 is already in this year's budget.
A
RESOLUTION NO.
A RESOLUTION APPROVING AN ADDENDUM TO THE
CONTRACT WITH RELIANCE STANDARD FOR EMPL
LIFE AND LONG TERM DISABILITY INSURANCE C
BE IT RESOLVED BY THE CITY CO ,+a -,I. OF HE OF
FAYETTEVILLE, ARKANSAS:
Section 1. That the City Counc' F . the City.. '' ay' eville, ' kansas
hereby approves an as to t act wig Reliance S for
employee Life an s g T: Disab; ance erage. A opy of the
Addendum markeda part hereof.
ATTEST:
une 2007.
By.
OODY, Mayor SONDRA E. SMITH, City Clerk/Treasurer
MEMORANDUM OF AGREEMENT
This agreement is made on the day of June 2007, by and between Reliance Standard
Life Insurance Company ("RSL") and City of Fayetteville. ("Policyholder").
WHEREAS, Policyholder holds Group Policy Number GL -141373 (the "Policy"), a group
life policy issued by RSL effective as of November 1, 2006, and
WHEREAS, Clyde Randall (the "Employee") was an Employee of the Policyholder, and who
died on December 31, 2006; and
WHEREAS, the Employee was not actively at work at the time the Policy became effective;
and
WHEREAS, the Employee did not retum to work for one fall day prior to the date of his
death; and
WHEREAS, the Employee was not eligible for benefits under the terms of the Policy; and
WHEREAS, the Policyholder is seeking payment to the Employee's beneficiary in the
amount of $70,000.00, even though no such benefit is payable under the terms of the Policy.
NOW THEREFORE, inconsideration of the mutual covenants and promises contained
herein, RSL and Policyholder do hereby agree as follows:
1. RSL shall pay to the Employee's beneficiary the sum of $70,000.00. The
payment check may bear the legend "extra contractual payment".
2. The Policyholder will ensure that the existing Policy remain in force with RSL at
the current rates until the renewal date, November 1, 2009 (the "Initial Policy
Period")
3. The Policyholder shall thereafter renew the Policy for an additional term of either
one or two years; at the Policyholder's option, (the "Renewal Term") at the
applicable rate determined by actuanally reasonable underwriting guidelines and
the experience during the Initial Policy period. The renewed Policy shall remain
in effect through the Renewal Term.
4. In the event that Policyholder breaches any term of this agreement, including but
not limited to the obligation to pay premiums during the Initial Policy Period and
the Renewal Term, Policyholder shall reimburse RSL the sum of $70,000.00, ,
within 15 days of Policy termination
Policyholder shall be responsible for any legal fees and costs incurred by RSL in
recovering the $70,000.00 payment.
6. It is agreed and understood that any payments made pursuant to this Agreement
by RSL shall be made as an accommodation to Policyholder, and shall not
constitute a waiver of any of the Policy provisions or defenses available to RSL
under the Policy, nor shall any changes constitute an admission of liability on the
part of RSL under the Policy.
7. It is agreed and understood that RSL makes no representation as to the nature of
any payments for federal or state income tax purposes.
8. Policyholder hereby releases and forever discharges RSL, its predecessors and
successors and assigns, agents, employees, officers, directors, consultants and any
other person whatsoever from all claims, demands, damages, liabilities, expenses,
damages and causes of action of any kind, with respect to any obligation under
the Policy on the life of Clyde Randall.
9. Policyholder agrees to indemnify RSL from any and all claims whatsoever
asserted against RSL by any persons, which arise out of the payment(s) provided
for in this Agreement.
10. This agreement constitutes the entire agreement between RSL and Policyholder
with regard to the payment of any benefits for or on behalf of Employee as set
forth herein, and supersedes any prior oral or written agreements between the
parties relating to the payment of benefits for or on behalf of Employee.
11. This agreement is governed by the laws of the State in which the Policy was
issued. No changes to this agreement shall be valid or binding unless in writing
and jointly signed by authonzed representatives of both RSL and Policyholder.
-2-
IN WITNESS WHEREOF, intending to be legally bound hereby, the parties have hereunto
affixed their hands and seals on the dates set forth below.
RELIANCE STANDARD LIFE CITY OF FAYETTEVILLE
INSURANCE COMPANY
By: By:
Authorized Representative Authorized Representative
?-+ SCCRr \ARy
Printed Name and Title
DATE. C(lyk°l
-3-
DATE:
Punted Name and Title
FAYETTEVILLE
THE CRY OF FAYETTEVILLE, ARKANSAS
KIT WILLIAMS. CITY ATTORNEY
DAVID WHITAKER, ASST. CITY ATTORNEY
DEPARTMENTAL CORRESPONDENCE
LEGAL DEPARTMENT
TO: Dan Coody, Mayor
City Council
CC: Missy Leflar, Human Resources Division Manager
FROM: Kit Williams, City Attorney
DATE: June 13, 2007
RE• $70,000.00 insurance payment for Clyde Randall
Missy Leflar, Human Resources Division Manager, has succeeded in
getting Reliance Standard Life Insurance Company to agree to pay Clyde
Randall's widow the face value of his life insurance policy even though the
change in life insurance carriers last fall appeared to make him ineligible.
Reliance agreed to make this payment if the Council agreed to at least a one.
additional year extension of coverage (2009-2010).
Since this City Council cannot absolutely hind a future City Council,
the City would have to repay this $70,000.00 to :Reliance if a future City
Council decided to change carriers or otherwise not renew the policy with
Reliance before the end of 2010. The City of Fayetteville has historically
changed insurance carriers infrequently and would likely independently
choose to remain with Reliance through 2010 as long as it is providing good
service and competitive rates. Therefore, this Memorandum of Agreement
which will get the $70,000.00 to Clyde Randall's widow promptly and
without court action should be approved by the Cit\ Council.
I would like to thank Missy for her leadership and efforts on this
matter 1 was initially concerned that litigation, with its delays and uncertain
results, would be inevitable. Missy's persistence and negotiating skills
helped avoid litigation and will likely result in payment,to Clyde Randall's
widow without cost to the City of our taxpayers.
MEMORANDUM OF AGREEMENT
This agreement is made on the day of June 2007, by and between Reliance Standard
Life Insurance Company ("RSL") and City of Fayetteville. ("Policyholder").
WHEREAS, Policyholder holds Group Policy Number GL -141373 (the "Policy"), a group
life policy issued by RSL effective as of November 1, 2006; and
WHEREAS, Clyde Randall (the "Employee") was an Employee of the Policyholder, and who
died on December 31, 2006; and
WHEREAS, the Employee was not actively at work at the time the Policy became effective;
and
WHEREAS, the Employee did not return to work for one full day prior to the date of his
death; and
WHEREAS, the Employee was not eligible for benefits under the terms of the Policy; and
WHEREAS, the Policyholder is seeking payment to the Employee's beneficiary in the
amount of $70,000.00, even though no such benefit is payable under the terms of the Policy.
NOW THEREFORE, in consideration of the mutual covenants and promises contained
herein, RSL and Policyholder do hereby agree as folloss:
1. RSL shall pay to the Employee's beneficiary the sum •of $70,000.00. The
payment check may bear the legend "extra contractual payment".
2. The Policyholder will ensure that the existing Policy remain in force with RSL at
the current rates until the renewal date, November 1, 2009 (the "Initial Policy
Period")
The Policyholder shall thereafter renew the Policy for an additional term of either
one or two years_ at the Policyholder's option (the "Renewal Term") at the
applicable rate determined by actuarial); reasonable underwriting guidelines and
the experience during the Initial Policy period. The renewed Policy shall remain
in effect through the Renewal Term.
In the event that Policyholder breaches any term of this agreement, including but
not limited to the obligation to pay premiums during the Initial Policy Period and
the Renewal Term, Policyholder shall reimburse RSL the sum of $70,000.00„
within 15 days of Policy termination.
5. Policyholder shall be responsible for any legal fees and costs incurred by RSL in
Deleted: plus inleresi
recovering the $70,000.00 payment.
It is agreed and understood that any payments made pursuant to this Agreement
by RSL shall be made as an accommodation to Policyholder, and shall not
constitute a waiver of any of the Policy provisions or defenses available to RSL
under the Policy, nor shall any changes constitute an admission of liability on the
part of RSL under the Policy.
7. It is agreed and understood that RSL makes no representation as to the nature of
any payments for federal or state income tax purposes.
8. Policyholder hereby releases and forever discharges RSL, its predecessors and
successors and assigns, agents, employees, officers, directors, consultants and any
other person whatsoever from all claims, demands, damages, liabilities, expenses,
damages and causes of action of any kind, with respect to any ohlieation under
the Policy on the life of Clyde Randall.
9. Policyholder agrees to indemnify RSL from any and all claims whatsoever
asserted against RSL by any persons, which arise out of the payment(s) provided
for in this Agreement.
10. This agreement constitutes the entire agreement between RSL and Policyholder
with regard to the payment of any benefits for or on behalf of Employee as set
forth herein, and supersedes any prior oral or written agreements between the
parties relating to the payment of benefits for or on behalf of Employee.
I1. This agreement is governed by the laws of the State in which the Policy was
issued. No changes to this agreement shall be valid or binding unless in writing
and Jointly signed by authorized representatives of both RSL and Policyholder.
IN WITNESS WHEREOF, intending to be legally bound hereby, the parties have hereunto
affixed their hands and seals on the dates set forth below.
RELIANCE STANDARD LIFE CITY OF FAYETTEVILLE
INSURANCE COMPANY
By: By:
Authorized Representative Authorized Representative
Printed Name and Title Printed Name and Title
•
Deleted: known or unknown, which
could now or may in the future arise
against RSL. or the others identified
herein under the group policy or under
this agreement. with respect to any
payments made hereunder.
•
(6.29.07) Clarice Pearman - Fwd: Re: Randall Agreement
From: Missy Leflar
To: Clarice Pearman
Date: 6.29.07 9:18 AM
Subject: Fwd: Re: Randall Agreement
Clarice,
Fyi.
Missy
Missy Leflar
Human Resources Division Manager
City of Fayetteville
113 W. Mountain
Fayetteville, AR 72701
PH: 479-575-8298
Fax: 479-718-7698
E-mail: mleflar@ci.fayetteville.ar.us
»> "Charles Denaro" <Charles.Denaro(arsli.com> 6/29/2007 7:40 AM »>
Missy, I've been out of the office on business. I'm returning on Monday
7/1. Will try to get to it then.
Charles Denaro
Vice President, Secretary
& Deputy General Counsel
Reliance Standard Life Insurance Co
Phone: 267-256-3810
Fax: 267-256-0650
e-mail charles.denaro@rsli.com
This e-mail message is for the intended recipient and may contain
confidential and privileged information. Any unauthorized review, use,
disclosure or distribution of this message is strictly prohibited. If
you have received this message in error, please notify the sender
immediately by reply e-mail and delete this message from your computer.
Thank you. Reliance Standard Life Insurance Company.
»> "Missy Leflar" <mleflar ci.favetteville.ar.us> 6/28/2007 7:57 PM
Charles,
I was wondering when our City Clerk's office (Clarice Pearman) might be
sent a copy of the contract with an original signature on it?
Per the previous email to you, the City has an ordinance or other such
rule that we have to have those before we can consider the contract in
force.
Once we have that, we can send you something with the Mayor's
signature.
I thought this might have a bearing on Mrs. Randall receiving her
check. I didn't want her check held up.
Thank you,
Missy Leflar
age 1
(6.29.07) Clarice Pearman - Fwd: Re: Randall Agreement Page 2
Missy Leflar
Human Resources Division Manager
City of Fayetteville
113 W. Mountain
Fayetteville, AR 72701
PH: 479-575-8298
Fax: 479-718-7698
E-mail: mleflar@ci.fayetteville.ar.us
»> "Charles Denaro" <Charles.Denaro@rsli.com> 6/13/2007 11:57 AM »>
Missy, the revised agreement is attached with changes highlighted.
Charles Denaro
Vice President, Secretary
& Deputy General Counsel
Reliance Standard Life Insurance Co
Phone: 267-256-3810
Fax: 267-256-0650
e-mail charles.denaroersli.com
This e-mail message is for the intended recipient and may contain
confidential and privileged information. Any unauthorized review,
use,
disclosure or distribution of this message is strictly prohibited. If
you have received this message in error, please notify the sender
immediately by reply e-mail and delete this message from your computer.
Thank you. Reliance Standard Life Insurance Company.
(7.12.07 Clarice Pearman - Reliance Standard - Page 1
From: Clarice Pearman
To: Leflar, Missy
Date: 7.12.07 10:02 AM
Subject: Reliance Standard
Missy,
Please let me know what the status is on the signed Memorandum of Agreement. I still have not heard from their counsel
regarding the agreement. Pd like to finish processing this item.
Have a good day.
Thanks.
Clarice
RELIANCE STANDARD
Life Insurance Company
CHARLES 1'. t)J;N:ARO
VIOL PRLSIDPNI. SBC kI CARY AND
DPFIII'ti Gr'NARAI, COUNSEL
July 12, 2007
Missy Leflar
Human Resources Division Manager
City of Fayetteville
113 W. Mountain
Fayetteville, AR 72701
Re: Clyde Randall
Dear Missy:
2001 Market Street, Suite 1500
Philadelphia, PA 19103-7090
(267) 256-3500
(800) 351-7500
Enclosed are two copies of the agreement regarding the above captioned matter which I have
executed on behalf of Reliance Standard Life Insurance Company. Please have the appropriate city
official execute both copses and return one fully executed copy for my files. Your cooperation in
this matter is appreciated.
Charles T. Denaro
a DELPHI company
Direct Dial: 267-256-3810 • Facsimile: 267-256-0650 • e-mail: chades.denaro@rsli.com