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Contracts Worth a Second Look
AGRIP, March 7, 2018
Robyn Sykes, MCIT Executive
Director [email protected]
Jennifer Wolf, MCIT Staff Counsel
for Risk Control [email protected]
THE INFORMATION CONTAINED IN THIS HANDOUT IS
INTENDED FOR GENERAL INFORMATION PURPOSES ONLY
AND DOES NOT CONSTITUTE LEGAL OR COVERAGE ADVICE
ON ANY SPECIFIC MATTER.
Today’s Agenda Contracts worth a second look
Today’s Agenda
Discuss policy and practices for contracts
regarding
Governance
Professional Services
Technology
Association Agreements
Types of Contracts Contracts Worth A Second Look
Governance Contracts
Contracts that typically involve pool
operations that rise to Board level
Reinsurer
Investment
Actuary
Outside General Counsel
Broker
Third Party Administrator
Technology Contracts
Software
Firewall
Encryption
Cloud providers
Building security
HVAC
Professional Services
Pharmacy Benefit Manager/PBM
Bill Review
Independent Medical Exam Providers
Independent Adjusters
Outside counsel (not GC)
Association Relationships
Embedded
Sponsored
Understood
To Have or Not to Have a
Contract Policy Contracts Worth a Second Look
Contract Policy
Value in having one?
Contract Policy
Consider delineating roles and
responsibilities
Board role
Subject matter expert
Legal—when to retain outside counsel
Contract Policy
Requests for Proposals (RFP)
Required by statute or policy
If required by policy:
Purpose for requirement
How often required
Which contracts
Build in flexibility
Contract Policy Consider putting in RFP
Required Contract Terms
Insurance
Indemnification
Subcontractors
Access to Data
Security
Confidentiality/Sunshine law
Review all responses for “exceptions” to the RFP
Contract Policy- Terms
Policy can establish key terms:
Minimum/Types Insurance Requirements
Recommended Indemnification language
Assignment/Subcontractors
Legally Required provisions:
Audit,
anti-discrimination,
sunshine laws
Venue/Choice of Law
Contract Policy
Build in flexibility
Who gives permission for exceptions from
recommended standards
Considerations for All
Contract Types Contracts Worth a Second Look
Standard Terms
Terms
Scope of Service
Deliverables/Reports to Pool
Length of Contract
Exit/Termination Provision
Insurance
Even if not “technology” provisions for
breach, sunshine laws, security of data
Standard Terms
Indemnification
Assignment/Subcontract
Legally mandated provisions/obligations
of Pool
Breach of contract and remedies
Standard Terms
If access to data (physical and virtual):
Ownership
Storage
Security
Breach
Insurance
Records Retention/Destruction
Standard Terms
Things to watch out for:
Limitation of liability
Cap on types and amounts of damage
Special Considerations Contracts Worth a Second Look
Governance
To bid or not bid
Length of contract
TPAs
Reinsurance
Confidentiality
Technology Contract Limitations on Liability
Security
Audit Reports
Technology Contracts
Service Level Agreement
Service Availability
Scheduled downtime
Unscheduled downtime
Compensation for non-compliance
License agreements
Ensuring use matches license
Technology Contracts
Termination/Wind Down
Data held by vendor
Information known to vendor
Security clauses survive contract
Assistance with new vendor
Litigation holds
Professional Services
Master Professional Services Agreement
Frequently used services
How frequent to renegotiate
Term/Exit provisions
Reinsurer
Treaty sufficient?
How frequently going to bid
Associational Agreements
Best to identify relationship in writing
Consideration
Discussion Contracts Worth a Second Look
