2010-220ORDINANCE NO. 2010-220
AN ORDINANCE ACCEPTING COMPETITIVE SEALED PROPOSALS AND AWARDING A
THREE-YEAR CONTRACT FOR BENEFIT CONSULTANT SERVICES FOR THE CITY OF
DENTON; PROVIDING FOR THE EXPENDITURE OF FUNDS THEREFOR AND PROVIDING
AN EFFECTIVE DATE (RFSP 4484-BENEFIT CONSULTANT SERVICES AWARDED TO
MCGRIFF, SEIBELS AND WILLIAMS OF TEXAS, INC. IN THE ANNUAL AMOUNT OF
$48,500 FOR A THREE YEAR TOTAL OF $145,500).
WHEREAS, the City has solicited, received and evaluated competitive sealed proposals for
the purchase of Insurance Consultant Services in accordance with the procedures of State law and
City ordinances; and
WHEREAS, the City Manager or a designated employee has received and reviewed and
recommended that the herein described proposals are the most advantageous to the City considering
the relative importance of price and the other evaluation factors included in the request for proposals;
and
WHEREAS, the City Council has provided in the City Budget for the appropriation of funds
to be used for the purchase of the materials, equipment, supplies or services approved and accepted
herein; NOW, THEREFORE,
THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS:
SECTION 1. The items in the following numbered request for proposal for materials,
equipment, supplies or services, shown in the "Request Proposals" on file in the office of the
Purchasing Agent, are hereby accepted and approved as being the most advantageous to the City
considering the relative importance of price and the other evaluation factors included in the request
for proposals.
RFSP
NUMBER CONTRACTOR AMOUNT
4484 McGriff, Seibels & Williams of Texas, Inc. $145,500
SECTION 2. By the acceptance and approval of the above numbered items of the submitted
proposals, the City accepts the offer of the persons submitting the proposals for such items and
agrees to purchase the materials, equipment, supplies or services in accordance with the terms,
specifications, standards, quantities and for the specified sums contained in the Proposal Invitations,
Proposals, and related documents.
SECTION 3. Should the City and person submitting approved and accepted items and of the
submitted proposals wish to enter into a formal written agreement as a result of the acceptance,
approval, and awarding of the proposals, the City Manager or his designated representative is hereby
authorized to execute the written contract; provided that the written contract is in accordance with
the terms, conditions, specifications, standards, quantities and specified sums contained in the
Proposal and related documents herein approved and accepted.
SECTION 4. By the acceptance and approval of the above enumerated bids, the City Council
hereby authorizes the expenditure of funds therefor in the amount and in accordance with the
approved bids.
SECTION 5. This ordinance shall become effective immediately upon its passage and
approval.
PASSED AND APPROVED this the Z/~~day of &IMkL'2010.
ATTEST:
JENNIFER WALTERS, CITY SECRETARY
BY:
APPROVED AS TO LEGAL FORM:
ANITA BURGESS, CITY ATTORNEY
BY:
1-AIS-File 4484
Employee Benefits Brokerage Service Agreement
THIS BROKERAGE SERVICE AGREEMENT (this "Agreement"), dated as of
October 1, 2010 is between MCGRIFF, SEIBELS & WILLIAMS of TEXAS,
INC. ("MSW") and the CITY OF DENTON ("Client").
Recitals
A. The Client is seeking insurance policies for the coverages described on
Exhibit A attached hereto and incorporated herein by reference (the
"Insurance Policies");
B. The Client is seeking some or all of the Employee Benefit Management
Services and related insurance services described on Exhibit B attached
hereto and incorporated herein by reference (the "Employee Benefit
Management Services"); and
C. MSW provides insurance brokerage services on behalf of clients,
including without limitation the solicitation, negotiation and servicing of
insurance policies ("Insurance Placement") directly with insurers and/or
through third party service providers. MSW also provides Employee
Benefit Management Services to clients.
NOW THEREFORE, the Client and MSW, with the intent to be legally bound, agree as
follows:
1. Term of this Agreement. This Agreement will commence on the date hereof and
will end on the earlier of (a) the date determined in accordance with Section 7 below, or
(b) the first anniversary of this Agreement.
2. Insurance Placement
A. Solicitation, Negotiation and Servicing of Insurance Policies by MSW.
(i) Coverage Design and Specifications: The Client will advise MSW of its current
employee benefit programs, proposed employee benefit programs and associated
employee data. With respect to any employee data, MSW and the Client agree that
they shall remain compliant with all Health Insurance Portability and Accountability
Act ("HIPAA") provisions as well as those of any other applicable federal, state or
local laws and regulations, including any state privacy law or regulation enacted or
promulgated under the authority of the Gramm-Leach-Bliley Act or any state privacy
law or regulation which preexisted said Act's enactment and which is still in effect or
with either of the party's internal privacy policies at all times. Each of MSW and Client
shall be responsible for its own conduct relating to such data, including the costs of
legal representation and any legal claims for damages or fines arising out of its own
conduct.
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Client will provide MSW access to the appropriate personnel so that MSW may
gather the data necessary to develop the specifications (the "Specifications") and
prepare an underwriting submission for presentation to one or more insurance
companies and/or third party service providers selected by MSW and the Client
(the "Selected Insurance Companies and/or Third Party Service Providers").
Such underwriting submissions shall at all times remain the confidential work
product and property of MSW.
(ii) Marketing and Negotiation
(a) MSW will submit the Specifications to the Selected Insurance
Companies and/or Third Party Service Providers. MSW may in its
discretion arrange meetings between the Client and personnel of some or
all of the Selected Insurance Companies and/or Third Party Service
Providers.
(b) MSW will negotiate with the Selected Insurance Companies and/or
Third Party Service Providers with respect to the provisions of the
Insurance Policies or requested services, including, without limitation, the
coverage, terms, and pricing of the policies/services. At the end of the
marketing process, MSW will provide the Client with a report
summarizing the results of the negotiations (the "Quotes"). MSW
reserves the right to omit Quotes from the summary report, and upon the
Client's request will inform the Client as to how many Quotes were
omitted and why.
(iii) Insurer Security Evaluation: MSW will provide the Client with a
summary report of the ratings and/or publicly available financial results of all the
insurance companies participating in the Client's program (the "Program").
Unless otherwise disclosed to the Client, MSW will not include any insurer in the
Program unless such insurer meets MSW minimum Security Standards at the date
coverage is effective.
(iv) Service Plan: MSW, with input from the Client, will develop a service
plan in connection with placement of the Insurance Policies under the Program
(the "Service Plan"). Among other things, MSW will provide the following
services during the term of this Agreement as follows:
(a) Confirmation of the status of a placement will be provided and
delivered to Client prior to the renewal date;
(b) Arrangement of periodic meetings with Client at mutually agreed
upon times to discuss pertinent topics;
(c) Monitor issuance of certificates of insurance from insurance
companies
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(d) Provision of claim reports and loss runs upon reasonable request;
(e) Check for accuracy of all Insurance Policies in the Program before
delivery to the Client.
B. Client's Notification Obligations.
(i) Changes in Employee Enrollment or Contribution Levels: Upon the
occurrence of any event giving rise to a material change in employee enrollment
or contribution levels during the term of this Agreement, the Client will notify
MSW of any such material changes. The Client will notify MSW and consult
with MSW regarding prospective changes in operations that may result in the
cancellation and or re-underwriting of the Insurance Policies issued under the
Program.
(ii) Change in Scope; The Client will notify MSW if there is a change in the
Client's operations that affects the nature and scope of its insurance program and
agrees to renegotiate the Fee described in section 4 hereof in good faith as a result
of such change in scope.
3. Employee Benefit Management Services
MSW will make the Employee Benefit Management Services available to the Client and
will provide any and all of such services as requested by the Client and agreed to by
MSW. The Employee Benefit Management Services are and shall be separate and apart
from any services provided under the Service Plan described in Section 2.A.(iv) of this
Agreement.
4. Remuneration of MSW
A. The Client will pay MSW a fee in the amount of $ 48,500 (the "Fee") for
Insurance Placement and Employee Benefit Management Services.
B. The Fee will be payable upon receipt of an invoice by the Client.
C. If MSW receives commission for Insurance Placement with respect to one or
more of the Insurance Policies described on Exhibit A (a "Commission"), the
Fee will be reduced by the amount of such Commission. Final adjustments to
the Fee amount will be made by MSW after the determination and receipt by
MSW of all Commissions, net of any. adjustments pursuant to any audit,
endorsement, accounting reconciliation or other applicable business process.
D. The Client acknowledges that:
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(i) receipt of a Commission constitutes remuneration of MSW for
Insurance Placement with respect to the applicable Insurance Policies
under the Program;
(ii) the remaining Fee does not include remuneration of MSW for
Insurance Placement with respect to the Insurance Policies for which
MSW receives Commission; and
(iii) the remaining Fee is separate from and in addition to any such
Commission.
E. Fee Upon Termination: If this Agreement is terminated pursuant to Section
9 hereof, the Fee shall be earned as follows:
(i) 50% as of the commencement of this Agreement;
(ii) 75% after five months from the date of this Agreement;
(iii) 100% after nine months from the date of this Agreement.
F. With respect to Insurance Placements and/or Employee Benefit Management
Services undertaken on behalf of the Client that are not contemplated by this
Agreement, MSW may be compensated pursuant to a separate agreement or
by the insurance companies or intermediaries utilized in such Insurance
Placements. MSW will make information regarding such agreements and
compensation available to the Client upon request.
Other Income
With respect to Insurance Placement and Employee Benefit Management Services
described in or provided pursuant to this Agreement, MSW will not execute or accept any
monetary compensation pursuant to any (1) market service agreement, (2) placement
service agreement, or (3) agreement providing for any bonus, override or contingency
that would be received from any type of intermediary or insurance company. Further,
MSW will instruct all insurance companies to exclude insurance policies placed pursuant
to this Agreement from any contingency agreements, bonuses and overrides. This does
not preclude MSW from accepting non-monetary awards, including trips and other
prizes, which MSW believes are important for professional and business development.
6. Effect of this Agreement on other Disclosures of Remuneration and Other Income
Received by MSW
The terms of this Agreement and disclosures made herein, including but not limited to
Section 4 "Remuneration of MSW" and Section 5 "Other Income," are in addition to any
other disclosures made to the Client regarding remuneration and other income received
by MSW. To the extent there are any differences between the provisions of this
Agreement and other disclosures made to the client, this Agreement replaces and
supersedes such other disclosures.
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7. Termination
A. Optional Termination
Either the Client or MSW may terminate this Agreement for any reason, or no
reason, by providing sixty (60) days' prior written notice to the other party.
B. Termination for Cause
MSW may terminate this Agreement immediately if the Client (1) fails to pay the
Fee, (2) becomes or is declared insolvent or bankrupt, (3) is the subject of any
proceeding related to its liquidation or insolvency (whether voluntary or
involuntary) which is not dismissed within ninety (90) calendar days, or (4)
makes an assignment for the benefit of creditors.
Notices
Notices required under this Agreement shall be in writing (including telefacsimile
transmission or similar writing) and shall be given to such party at his or its address or
telefacsimile number set forth below or at such other address or telefacsimile number as
such party may hereafter specify for the purpose of giving notice to the other party:
A. If to the Client:
City of Denton
601 E. Hickory, Suite A
Denton, Texas 76205
Attn: Scott Payne
Phone: 940-349-7836
Fax: 940-349-7803
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B. If to MSW: McGriff, Seibels & Williams of Texas, Inc.
5949 Sherry Lane
Suite 1300
Dallas, Texas 75225
Phone: (469) 232-2100
Fax: (469) 232-2101
Attention: Jeff Twitty
With a copy to: McGriff, Seibels & Williams, Inc.
2211 7tb Avenue South
P.O. Box 10265
Birmingham, Alabama 35202
Phone: (205) 252-9871
Fax: (205) 581-9293
Attention: BSA Audit Dept.
Each such notice, request, demand or other communication shall be effective (i) if given
by mail, 72 hours after such communication is deposited in the mails with first class
postage prepaid, addressed as aforesaid or (ii) if given by any other means, when
delivered at the address specified in this Section 10. Delivery of any notice, request,
demand or other communication by telefacsimile shall be effective when received if
received during normal business hours on a business day. If received after normal
business hours, the notice, request, demand or other communication will be effective at
10:00 a.m. on the next business day.
9. Miscellaneous Provisions
A. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
B. Time of the Essence. Time shall be of the essence in the performance of
each party's obligations under this Agreement.
C. Governing Law. This Agreement and the related writings and the respective
rights and obligations of the parties hereto shall be construed in accordance
with and governed by the laws (including, without limitation, the conflicts of
laws rules) of the state of Texas.
D. Client May Not Assign. The Client may not assign its rights under this
Agreement to any other party. This Agreement may be modified only in
writing executed by MSW and the Client.
E. Severance. The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any one or more of
the other provisions hereof. MSW and the Client agree that this Agreement
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shall be so interpreted as to give effect and validity to all the provisions hereof
to the fullest extent permitted by law.
F. Further Assurances. The Client shall sign such other documents
or instruments as MSW may reasonably request from time to time to further
the purposes of this Agreement.
G. Entire Agreement. This Agreement, the exhibits hereto, and the
documents and instruments referred to herein constitute the entire agreement
of the parties with respect to the subject matter hereof.
H. Headings/References.
(i) The headings used in this Agreement are included for ease of reference
only and shall not be considered in the interpretation or construction of this
Agreement.
(ii) Unless the particular context requires otherwise, any reference in this
Agreement (A) to a section, paragraph or other grammatical subdivision shall be
deemed to be a reference to a section, paragraph or other grammatical subdivision
of this Agreement only, and (B) to an Exhibit shall be deemed to be a reference to
an Exhibit attached to this Agreement only.
IN WITNESS WHEREOF, the Client and MSW have executed this Agreement as of the
date first written above.
McGriff, Seibels & Williams of Texas, Inc. The City of Denton
By: By:
Name: Jed Skeete Name: Gcorua.
Title: Executive
ice President
Title: C41, Mco dkY r
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EXHIBIT A
The Client has requested Insurance Placement, as referenced in Section 2, by MSW for
the following lines of coverage.
Life Coverage
Medical Coverage
Dental Coverage
Long Term Disability Coverage
Short Term Disability Coverage
Pharmacy Benefit Management Coverage
Vision Coverage
Stop Loss Coverage
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EXHIBIT B
Employee Benefit Management Services
MSW will provide the following Employee Benefit Management Services for the Client:
A. Strategic Benefit Planning. Agent/Broker will provide assistance in developing overall plan
benchmarks and targets to ensure that the plan meets the objectives of Client and its employees.
B. Benefit Design. Agent/Broker will help to ensure that benefit designs are consistent with the
strategic benchmarks and targets set forth in the strategic benefit planning process.
C. Administration. Agent/Broker will identify core administrative services, assess vendor
performance, and manage vendor relationships to provide appropriate program administration.
D. Funding. Agent/Broker will provide counsel regarding program funding alternatives, including
reviewing fee proposals and recommending budget rates, employee contribution rates, and
COBRA rates.
E. Vendor Selection. Upon client request, Agent/Broker will prepare Request(s) for Proposal (RFP),
analyze RFP's and prepare a summary report outlining responses. Vendors include, but are not
limited to:
• Voluntary Worksite Programs
• Wellness and Disease Management Programs
• Third Party Claims Administration
• Utilization Review Programs
• IRS Code Selection 125 Programs
• Preferred Provider Network Plans
• Online Enrollment Services
• Communication Services
• Health Savings Account Services
F. Communication. Agent/Broker will assist in drafting employee communications regarding
benefit program performance and changes, and assist in the review of plan documents and
insurance certificates during the planning and enrollment process.
G. Compliance Tools & Legislative Information. Agent/Broker will provide informational
materials on legislative developments impacting employee benefit plans, including access to
online reference tools on topics such as FMLA, COBRA, HIPAA, HIPAA Privacy, and Section
125.
H. Meetings with Client and Vendors. Services will include attendance at and facilitation of the
following meetings with Client and vendors to facilitate program management including day-to-
day operations and planning program changes:
Agent/Broker shall meet with Client on a quarterly basis to review all activities performed by
Agent/Broker during the prior quarter. The meetings will include discussion of business
concerns, including presentations of options and recommendations.
• Upon Client request, Agent/Broker shall meet with Client semi-annually to discuss review of
the program, state of the marketplace, progress made toward strategic plan, and developments
within Clients organization.
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• Agent/Broker shall meet with Client annually to review the stewardship report for the
preceding year, create a stewardship report outlining the goals and objectives for the
upcoming year, and agree upon Agent/Broker's fees for the next twelve month period.
1. Stewardship Report. Agent/Broker will develop and implement a detailed account stewardship
plan, which should include, but not be limited to, the following:
• Specific quantifiable and measurable goals and objectives for Agent/Broker's team relating to
Client's programs; and
• Detailed work plans which lay out the account management plan, work schedules, areas of
concentration, timing, and information requirements.
J. Data Analysis. Agent/Broker will provide Client with summary comparisons and work with
Client and TPA to secure additional reports as needed for claims analysis.
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