VendorNet Attachment.pdf

EXHIBIT A

INSURANCE BROKER OF RECORD

Contract # 505CAP-M20-AD200784-01

I. SCOPE OF WORK

The Contractor shall supply all the necessary personnel, equipment, and materials (except as may be otherwise provided herein) to accomplish the tasks set forth in this Contract, Exhibit A, RFP- AD200784 and Contractor's written proposal response dated September 11, 2019. Changes to the Scope of Work may be only be made in writing signed by both parties.

No State agency, other than the Department, has the discretion to use the Contractor for the placement of insurance, without the written approval of the Department.

A. RISK MANAGEMENT AND INSURANCE SERVICES

The Contractor, per this Contract and as outlined here and in RFP # AD200784, is deemed as the Insurance Broker of Records.

The State shall issue a broker of record letter naming Contractor as the broker of record on all policies including but not limited to the in-force policies identified in the most current edition of the policy schedule identified in Appendix 5 in the RFP materials to include both the “SOW-Policy Schedule” and “BOR – Policy Schedule” tabs as soon as practicable following the inception of the contract.

The State may elect to delay the broker of record letter naming Contractor as the broker of record of any policies effective prior to August 31, 2020 until as soon as practicable following the renewal.

Contractor shall:

a. Place excess insurance as needed for the State’s Excess Property and Excess Liability Programs and all other coverages needed for the State;

b. Place insurance as needed for Environmental Programs;

c. Place insurance as needed for Air Service/Drone Programs;

d. Place insurance as needed for Vanpool insurance;

e. Place insurance as needed for Cyber Liability;

f. Assist and advise on qualifications, selection and engagement of claims adjusting vendors and property loss prevention services;

g. Place insurance and/or surety bonds where requested and required where the State’s self-funded program is not accepted or the State chooses not to self-fund, and report quarterly on the amount placed, and;

Contract Number: 505CAP-M20-AD200784-01 Insurance Broker of Record

h. Contractor shall keep the Department informed of activities involving insurance marketing and placement involving other State agencies including the University of Wisconsin Systems and its individual campuses.

i. Provide other risk management services as requested and needed, with an emphasis on being a resource of knowledge and expertise to the Department as requested in RFP # AD200784 and as outlined in Contractor's written proposal dated September 11 , 2019, for Risk Management and Insurance Services to include but not be limited to:

1. Marketing Strategies

• Determination of strategy

• Assist in determining level of risk retention/transfer

• Selection of markets

• Negotiation of placement, pricing, coverage and limits

• Monitor market response and status of proposals

• Verify accuracy of all rates, rate classifications & premiums

• Development of manuscript policies

• Provide draft market submittals

• Develop insurance summaries

• Stewardship reports

• New product development* (special or unique coverages to address

State or agency specific needs)

• Provide periodic market updates

2. Risk Management Services

• Review all policies for accuracy to ensure they meet agreed upon criteria and coverages

• Policy interpretation

• Serve as resource on insurance, loss prevention, and risk management issues

• Advise on insurance industry customs, practices, current developments and other technical matters

• Periodic review of major open items & performance

• Consult in design of any new related programs as identified*

• Serve as resource for special projects*

• Consult with discussions related to premium methodology

• Review and comment on insurer loss control recommendations as needed

• Identification and evaluation of existing and emerging risk exposures and solutions Participate in Risk Management Council meetings and other University and State Agency meetings

• Risk Management Conference - planning, coordinating and/or presenting

3. Claims Management

• Serve as resource for catastrophic claims or unusual claims

• Monitor large claims and coordinate with excess carrier and BSRM

• Provide annual spot audit of Worker Compensation Claim

• Negotiate claims invoices/adjusting services

• Claim reporting and analyses*

• Provide timely notice of claim and updates to carriers and excess carriers

4. Risk and Financial Analysis

• Serve as resource for risk control and risk analysis services

• Optimum retention level analysis*

• Review and discuss loss experience summaries

• Prepare and provide exposure coverage analyses within first year of contract

5. Environmental

• Assist with the continuation of the State's program

• Advise the Department of Natural Resources on policy renegotiation, optional extended reporting periods and new policies to various markets when appropriate,

• Handle routine administrative tasks under the policy when new sites are added, including the collection of premiums, making sure the insurer provides correct endorsements, etc.

• Work with the Program staff on ways to improve the program.

• Help to promote and market the use of this program for the cleanup and redevelopment of property in Wisconsin.

• Assist the Department of Natural Resources with monitoring performance of the program.

• Assist in evaluating the timing for when the program should be renegotiated.

• Assist the Department for any other environmental insurance matters that may be required*

6. Proactive Property Loss Control Plan

• Assist in developing plan to centrally monitor and assist with building and grounds inspections of all critical State-owned sites

• Assist in developing plan for implementing recommendations as a result of the inspections

• Assist in developing plan to train agency personnel responsible for conducting inspections

• Assist in identifying and contracting resources to implement these plans

• Outline scope of probable maximum loss and/or risk identification studies related to property loss risk

• Conduct three (3) PML on an annual basis and/or risk identification studies related to property loss risk

• Assist in developing a plan for managing the risks associated with special collectibles and other high value items

• Monitor insurance surveys

• Secure loss control services

• Procure property, (including building, content and/or equipment as necessary) appraisal services (selection, contracting and billing/invoice).

Costs associated with completion of the property appraisal services are the responsibility of the State.

• Other related activities as required and requested*

7. Air Services/Drone

• Assist with the continuation of the State's program

• Advise and assist the State on its Aircraft Hull & Liability-Air Fleet policy and King Air policies

• Advise and assist the State on its Non-Owned

• Aircraft-Military Affairs policy

• Provide other activities and services*

8. Vanpool

• Develop renewal strategy Identify potential markets Collect data/loss information

• Prepare & submit submissions and review with the State of Wisconsin

• Interview carriers with the State of Wisconsin

• Obtain quotations & perform comparative analyses

• Select final carrier/program with the State of Wisconsin

• Assist with implementation of program

• Monitor results and relationships

• Maintain ongoing communications

9. Cyber Liability

• Assist with risk identification and analysis

• Complete in-depth risk cyber analytics, cyber evaluation and/or risk quantification*

• Identify potential markets

• Collect data/loss information

• Prepare submission

• Interview carriers with the State of Wisconsin Obtain quotations and perform comparative analyses

• Assist with selection of final carrier/program with the State of Wisconsin

• Assist with implementation of program

• Monitor results and relationships

• Maintain ongoing communications

* Activities that may or may not be considered outside the scope of the RFP AD200784. If work is requested by the Department and performed by the Contractor that is determined to be outside the scope of RFP AD200784 or requires the use of a 3rd party contractor or vendor be engaged on the State’s behalf, an additional fee/compensation may be required.

Prior to the commencement of the work, the additional fee/compensation shall be negotiated with, and agree to by the Department and the Contractor.

B. ANNUAL WORK PLAN

The Contractor and the Department shall develop an Annual Work Plan that shall outline the projects and the detailed activities related to each project the Contractor shall complete during each calendar year. The Annual Work Plan shall be reviewed and revised at quarterly meetings of the service team and used as a basis for developing the annual stewardship report and meeting which shall be held in the fourth quarter of each of the State’s fiscal year. The projects and activities in the Annual Work Plan can be added, deleted and/or modified. The Annual Work Plan shall not limit the activities and services required of the Contractor. The annual work plan shall include the preparation and presentation of the annual stewardship report.

The Annual Work Plan for subsequent years shall be completed by November 30th.

C. PARTNERSHIP/MINORITY BUSINESS

The Contractor has proposed to make every attempt to utilize Minority Owned Businesses, hereinafter called Partner. All payments shall be made to the Contractor and the Contractor shall provide payment to the Partner. The Contractor and Partner agree to complete and provide the necessary reports required of the Department to document any participation of the Partner for purposes of Minority Business development.

D. SERVICE TEAM

The Contractor's primary point of contact and lead broker, as well as the secondary point of contact and backup broker for the Contractor shall be approved by the Department. Any changes in the primary broker and any service team member changes shall only be made after consulting with and approved by the Department.

Any changes in the broker and any service team member changes shall only be made after consulting with and approved by the Department. The Contractor shall identify and provide other resources as required to provide the services required of the Department.

E. BROKERAGE TERMS

a. For the Fee Based Programs listed in Section II - Time, Cost and Administration, Contractor shall deliver the included Services to the Department for an annual fee (the "Fee"). To the extent permitted by law, Contractor will credit any retail commission received on Fee Based Programs listed in Section II against the Fee up to the full amount of the Fee received by Contractor. If Contractor is required by law to return any commissions that were credited against the Fee, for any reason, including but not limited to mid-term cancellation(s), Department agrees to reimburse Contractor for such amount.

b. In some instances, insurance placements made by Contractor on Department's behalf may require the payment of state surplus lines or other premium taxes and/or fees in addition to the premium itself. Contractor shall make every effort to identify any such tax and/or fee in advance, but in all instances the payment of these taxes and/or fees will remain the responsibility of Department and Contractor will invoice Department for the payment of such taxes and fees.

c. Contractor shall provide all marketing quotes to Department, including any applicable commission rates, received prior to binding coverages for the State's insurance programs.

Department shall also be provided prior to binding with an accounting of any amounts to be paid to Contractor, and any Contractor affiliates which act as broker on Department's behalf, together with any non-Contactor intermediary income if available, in connection with coverages placed for the State's insurance programs, including any insurer or third party fees, if applicable.

In addition, Contractor shall annually provide Department with a summary of all Contractor revenue received during the preceding year or contemplated to be received applicable to the State's insurance programs.

d. Premiums paid by Department to Contractor for remittance to insurers and Department premium refunds paid to Contractor by insurance companies for remittance to Department are deposited into fiduciary accounts in accordance with applicable insurance laws until they are due to be paid to the insurance company or Department. Subject to such laws and the applicable insurance company's consent, where required, Contractor shall retain the interest or investment income earned while such funds are on deposit in such accounts.

e. To the extent that any portion of Contractor's compensation, as reflected on Contractor's invoices, by operation of law, agreement or otherwise, becomes adjusted or credited to Department, it is Department's responsibility to disclose the actual net cost to Department of the brokerage and insurance costs Department has incurred to third party(ies) having an interest in such amounts.

f. Contractor does not guarantee the solvency of any market with which Contractor places business. Contractor encourages the Department to review the publicly available information since only the Department can make the ultimate decision to accept or reject a particular market. The decision to accept or reject an underwriter shall be made solely by the Department.

g. It is the Department's responsibility to take such steps as are necessary to notify those insurers whose policies may apply to any circumstances, occurrences, claims, suits, demands and losses in accordance with the terms and conditions of the Department's policies. Contractor shall, as directed by the Department (which may be provided in written form, including electronic communications), place insurer(s) on notice. The State agrees that notification to the Contractor must be made to Linda Joski or her replacement as agreed to by the State and the Contractor.

h. In instances where Contractor provides summaries of contractual requirements or provisions, or any suggested additional or alternative wordings to any contract or lease at the Department's request, such language must be reviewed by the Department's legal advisor before the Department takes action based upon Contractor's statements. Contractor does not and cannot provide legal advice as to whether the Department's insurance program covers legal obligations contained in the Department's contracts or leases. All descriptions of the insurance coverages are subject to the terms, conditions, exclusions and other provisions of the policies or any applicable regulations, rating rules or plans. Furthermore, it is understood that none of the services provided by Contractor are of a legal nature and Contractor shall not give legal opinions or provide legal advice or representations. However, nothing in this paragraph shall be construed as preventing Contractor from providing opinions as an insurance professional, nor shall anything in this paragraph be construed as limiting Contractor's obligations under this Agreement.

i. Contractor encourages its retail brokers to approach markets directly (without an intermediary) wherever possible. However, where Contractor believes it is in the Department's best interest, Contractor may recommend the use of intermediaries, including but not limited to co-brokers, sub-brokers, managing general agents/managing general underwriters, wholesale brokers, or reinsurance brokers (collectively, "Intermediary") to assist in the procurement and servicing of the Department's insurance. Contractor prefers, wherever possible, to use the services of a Contractor-affiliated Intermediary and Contractor shall not be responsible for a nonContractor affiliated Intermediary's actual or alleged acts, errors, or omissions or those of its officers, directors or employees. Any and all compensation earned by an Intermediary in connection with the programs shall be in addition to the compensation paid to Contractor and shall not be credited against the Fee.

j. Contractor gathers data containing information about our customers and their insurance placements, as well as information about the insurance companies that provide coverage to our customers or compete for our customers' insurance placements. In addition to the information provided by our customers, Contractor may collect information from commercially available sources. Such information may include name, address, email address and demographic data.

This information may be shared among Contractor affiliated businesses, as well as with third-party service providers acting on our behalf. In addition to being used to provide services to Contractor customers, the information may be used for business administration, business reporting, statistical analysis, marketing of Contractor products or services and providing consulting or other services to insurance companies for which Contractor or its affiliates may receive remuneration. Contractor takes appropriate measures to protect the privacy and confidentiality of our customers as well as to comply with applicable laws and regulations.

Contractor may use or disclose information about our customers if we are required to do so by law, Contractor policy, pursuant to legal process or in response to a request from law enforcement authorities or other government officials.

Due to the global nature of services provided by Contractor, the personal information you provide may be transmitted, used, stored and otherwise processed outside of the country where you submitted that information. If you have questions about Contractor data processing, please contact your Contractor account executive.

k. Unless otherwise instructed by the Department, Contractor will use the Department's logo, pictures, and other publicly available information to effectively market the Department's Programs.

l. Contractor and the Department waive their rights to a trial by jury in any lawsuit or other legal proceeding against the other arising out of any of Contractor's services provided to the Department. The Department and Contractor also will not name as a defendant any individual employee, officer or director of the other in any lawsuit or legal proceeding.

m. Contractor's insurance documents containing proposals to bind coverage, summaries of coverages, and certificates of insurance placed are furnished to clients as a matter of information for Contractor's clients' convenience. These documents summarize proposed and placed policies and are not intended to reflect all the terms, conditions and exclusions of such policies. Moreover, the information contained in these documents reflects proposed or placed coverage as of the effective dates of the proposed policies or the date of the summaries and does not include subsequent changes. These documents are not themselves insurance policies and do not amend, alter or extend the coverages afforded by the proposed or placed policies.

The insurance afforded by the proposed or placed policies is subject to all the terms, conditions and exclusions contained in such policies as they are issued by the insurers.

n. Contractor does not and cannot guarantee the availability or price of insurance for the Department's risks and will not be responsible for fluctuation in the premiums charged by insurers. Contractor will rely on the Department to review and approve calculation or estimation of premium and Contractor is not responsible for any loss occasioned as a result of our calculation or estimation of premium and statutory charges that may apply to the Department's insurance.

F. DISCLOSURE OF REVENUE

The Contractor shall be required to disclose all revenue received by the Contractor for services and insurance placements provided for the Department or any agency of the State of Wisconsin. Revenues disclosed shall include fees and commissions earned by the Contractor and the Partner, and shall also include commissions earned by any affiliates of Contractor including any wholesale brokerage fees. In the event wholesale brokerage fees are earned by a wholesale brokerage firm that is not affiliated with the Contractor shall, to the extent possible, disclose the commissions or fees earned by the wholesale broker. The Contractor shall disclose the revenue received on a periodic basis as required by the Department but no more than quarterly.

G. REPORT OF INSURANCE PLACEMENTS AND CLAIMS REPORTED

Wisconsin statutes require the Department approve all insurance purchased by the State or its agencies. Some agencies are authorized by the Department to work directly with the Contractor to procure the insurance they require however in all cases the Contractor must secure pre-approval from the Department. In order for the Department to be able to identify all insurance purchased by the state or its agencies, the Contractor is required to notify the Department on a quarterly basis of all insurance placements it has made for the state or its agencies and other services provided to the agencies.

The Contractor shall also notify the Department of all claims filed under any insurance policy purchased by the State or its agencies. The Contractor shall notify the Department immediately upon the receipt of a claim but no later than 10 working days. The Contractor is not deemed to have receipt of the claim until the claim has been tendered to the appropriate insurance carrier or third party administrator

H. RESERVED RIGHTS

The Contractor shall serve as the Insurance Broker of Record for the Department, the State and its agencies.

The Department reserves the right to contract with another Broker for any insurance placements in the event the Contractor is not meeting the needs of the Department, State or its agencies in the placement of insurance.

I. TRANSITION SERVICES

Contractor shall provide the following Services with respect to any transition required pursuant to Section I(S) of the Agreement:

• Be available as often as reasonably necessary to answer any questions during the transition period.

• Make the necessary introductions to all carriers of record and their underwriting and service staff.

• Provide an updated and complete coverage summary.

• Provide an ‘open and closed’ items list.

• Provide an “Activity Summary” report from each team member involved in the account.

• Be available for all meetings reasonably required by the State.

• Where necessary, provide administrative support for the State and its selected broker to complete the transition.

• Be available for an account review on a quarterly basis for a period of one year.

Contractor’s transition Services shall not include marketing or placing insurance coverage unless Contractor and the State can mutually agree on appropriate compensation for the applicable Services.

J. STATE’S OBLIGATIONS

For Services that specifically include insurance placement by Contractor as the broker, the State hereby authorizes Contractor to represent and assist the State in all discussions and transactions with insurance companies relating to the lines of insurance set forth on this Exhibit A when acting as the State’s insurance broker, provided that Contractor shall not place any insurance on behalf of the State unless so authorized by the State in writing. In addition, Services that include the placement of insurance coverage require the following:

1. The State shall provide Contractor with all information and documentation requested by Contractor and/or underwriters from which Contractor intends to secure quotes.

2. Contractor will consult with the State regarding the terms of the insurance quotes received, and the State shall have sole discretion in the selection of the ultimate insurance markets and policies chosen, as well as any other decisions involving the State’s risk management, risk transfer and/or loss prevention needs. Contractor will use reasonable efforts to secure insurance coverages on the State’s behalf and as directed by the State. Contractor will review policies to ensure coverage was secured as quoted and provide guidance to the State regarding the State’s policy or coverage inquiries. In the event an insurer cancels or refuses to issue a particular policy, Contractor will use reasonable efforts to obtain replacement coverage from another insurer.

3. The State is responsible for notifying applicable insurance companies directly in connection with any claims, demands, suits, notices of potential claims or any other matters in accordance with the terms and conditions of the State’s policies. Upon request, Contractor will assist the State in determining applicable claim reporting requirements and upon request will forward claims received from the State to the applicable insurance carrier.

II. TIME, COST AND ADMINISTRATION

A. The cost for the placement of excess property and excess liability insurance as needed and requested, providing general broker and risk advisory services, assistance in the selection process for claims adjusting and property loss prevention services is $90,000 per year payable as follows:

a. $45,000 payable by July 31st of each year;

b. $15,000 payable by September 30th of each year or when the State decides to accept the renewal option and the excess property and liability renewals are deemed by both parties to be reasonably completed for the services for the period July 1, 2020 through June 30, 2023; and

c. $30,000 payable by January 31st of each year or after the completion of Property and Liability renewal strategy meeting.

B. Special activities and projects requested by the Department that Contractor and Department considers as being outside the scope of the fees quoted for services described in RFP AD200784 will be charged at $150.00 per hour.

C. The compensation for the placement of excess property and liability insurance by a wholesaler (or 3rd party intermediary) shall be commission based and not exceed 3% of the total excess property and excess liability premium paid.

D. The compensation for the placement of pollution environmental/site coverage issued on behalf of the Department of Natural Resources will be a flat fee of $15,000 with no commissions.

E. The compensation for the placement of Aircraft Hull & Liability coverage including, but not limited to, the King Air, Pilatus Fleet & Non-Owned issued on behalf of the Department of Administration will be a flat fee of $17,500 with no commissions.

F. The compensation for the placement of University of Wisconsin System Cyber Liability will be a flat fee of $37,500 with no commissions.

G. The compensation for the placement of Vanpool Insurance issued on behalf of the Department of Administration will be a flat annual fee of $22,500 with no commissions.

H. The compensation for the placement of the Weather Insurance issued on behalf of the

Wisconsin State Fair Park Board will be a flat annual fee of $2,500 with no commissions.

I. The compensation for the placement of the Financial Institution Bond and Electronic Computer Crime policy issued to the State of Wisconsin Investment Board will be a flat annual fee of $7,500 with no commission.

J. The compensation for the Boiler & Machinery policy issues to the Department Administration/University of Wisconsin System will be a flat annual fee of $20,000 with no commission.

K. The compensation for the Excess Workers Compensation Program for the Wisconsin Works Program issued to the Department of Workforce Development will be a flat annual fee of $10,000 with no commission.

L. The compensation for the Excess Workers Compensation Program which would be issued to the Department of Administration will be a flat annual fee of $15,000 with no commission.

No fee will be charged if the policy is not purchased.

M. The same schedule shall apply to any renewal options.

N. All fees/commissions for other services and/or insurance placements shall be paid by the Department or shall be paid by individual agencies at the time of placement or when services are delivered, or shall be paid by the applicable insurance markets in conformance with customary commission payment processes. The Department reserves the right to negotiate all fees and commissions for services or insurance placements requested not specifically identified in this Contract. All commission based placements for additional insurance coverages placed by the broker will not exceed 12% of retail brokerage commission. If a wholesale broker or intermediary is required the wholesale brokerage or intermediary commission will not exceed 6%, without written authorization from the Department. In the event the Agreement is terminated prior to the expiration of the Agreement’s term, Contractor’s compensation shall deemed earned pursuant to the following schedule:

Fee-based placements and services

During first 3 months of the annual policy term: 50% During the 4th through 9th month of the annual policy term: 75% During the 10th through 12th month of the annual policy term: 100%

Commission-based placements and services

100% Fully earned at the time of policy inception.

The State shall pay any amounts that are earned pursuant to the above schedule, and Contractor shall refund to the State any compensation paid to Contractor but not earned pursuant to the above schedule as of the effective date of termination.

O. Contractor shall not accept supplemental or contingent commissions for the policies placed under this Contract.