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HomeMy WebLinkAbout2003-05-19 City Council (4)4 City of Palo Alto TO:HONORABLE CITY COUNCIL FROM:CITY MANAGER DEPARTMENT: HUMAN RESOURCES DATE:MAY 19, 2003 CMR: ~ SUBJECT:APPROVAL OF CONTRACT IN THE AMOUNT OF $700,000 EACH YEAR FOR THREE YEARS WITH METLIFE FOR THE CITY OF PALO ALTO’S GROUP LIFE~ ACCIDENTAL DEATH AND DISMEMBERMENT (AD&D), AND LONG TERM INSURANCE DISABILITY (LTD) PLANS RECOMMENDATION Staff recommends that Council: Approve and authorize the Mayor to execute a contract in substantially the form of the attached document with MetLife in the amount not to exceed $700,000 for one year to provide group life, accidental death and dismemberment (AD&D) and long term disability (LTD) insurance benefits. Authorize the City Manager or designee to exercise the option to renew the contract in the amount not to exceed $700,000 for each of the second and third years, provided Met_Life is responsive to the City’ s needs, and the quality of its work is acceptable during the term of the contract. DISCUSSION Proiect Description The work to be performed under this contract is for underwriting the City’s group life, AD&D and LTD benefits. Existing agreements with City employee bargaining units provide for maintaining these benefits. On March 1, 2000, the City entered into a three year contract with Standard Insurance Company to underwrite the City’s group life, AD&D and LTD benefits. The City issued a Request for Proposal (RFP) at the end of the contract term to seek competitive bids to determine if the current arrangement is the most advantageous for the City of Palo Alto and its employees. CMR: ~Page 1 of 3 Selection Process Staff sent a (RFP) to 10 insurance companies on January 21, 2003. The proposal response period was 27 days. Eight companies submitted proposals: Minnesota Mutual, Mutual of Omaha, Aetna, Prudential, MetLife, UNUM, CIGNA and Standard Insurance, the current underwriter. The proposals ranged from $659,628 to $986,968. Mutual of Omaha and Minnesota Mutual did not submit complete proposals and were not considered. Six proposals did meet minimum RFP requirements and were considered for review. Those companies not responding indicated that they either were not underwriting public agency business or they would not be competitive. A selection advisory committee, consisting of representatives from Management and Confidential and the SEIU employee bargaining units as well as the Human Resources and Payroll Department staff, reviewed the proposals. CIGNA, Aetna and MetLife were selected as finalists and invited to participate in oral interviews. The committee carefully reviewed each firm’s qualifications relative to the following criteria: Claims paying administration, including similar experience and expertise in the type of work required Vocational rehabilitation capabilities Knowledge of and demonstrated experience in worMng with public agencies and the Public Employees’ Retirement System Qualifications and experience of staff Customer service capabilities Plan and general administration Underwriting capabilities Worker’s compensation interface Statistical reports Costs of providing insurance services MetLife was selected because it demonstrated its ability to provide the highest level of claims administration services required by the City at a very competitive cost. RESOURCE IMPACT The City of Palo Alto will save approximately $301,000 per year in premium payments compared to prior year premiums. There will be a decrease in the funding required for the group life, AD&D and LTD insurance in the 2003-2004 Proposed Budget, and a decrease in funding in the General Benefits and Insurance Internal Service Fund. POLICY IMPLICATIONS This request does not represent a change in existing policies. CMR: 227:03 Page 2 of 3 ENVIRONMENTAL REVIEW This is not a project under the California Environmental Quality Act ATTACHMENTS Exhibit A: Attachment A: Short form agreement Exhibits to Agreement PREPARED BY: Sandra T.R. Blanch, Risk and Benefits Manager DEPARTMENT HEAD: LESLIE LOOMIS Director of Human Resources CITY MANAGER APPROVAL HARRISON Assistant City Manager ClVIR: 227:03 Page 3 of 3 AGREEMENT BY THIS AGREEMENT MADE AND ENTERED INTO ON THE DAY OF BY AND BETWEEN THE CITY OF PALO ALTO "CITY", ANDMetropOlitall Life Exhibit A Insurance NO. [DATE TO BE ENTERED 19~ C ~T}I[ ICo~pa~ I ~~ (ADDRESS) One Madison Avenue (ciTy) New York, New Yo~,~) i0010- (PHONE)3690"CONTRACTOR" IN CONSIDERATION OF THEIR MUTUAL COVENANTS, THE PARTIES HERETO AGREE AS FOLLOWS: ® CONTRALTO R SHALL PROVIDE OR FURNISH THE FOLLOWING SPECIFIED 1) GOODS AND MATERIALS, 2) SERVICES OR 3) A COMBiNATiON THEREOF AS SPECIFIED IN THE EXHIBITS NAMED BELOW AND ATTACHED HERETO AND INCORPORATED HEREIN BY THIS REFERENCE: TITLE: (DESCRIPTION) Group Life Insurance; Accidental Death & Dismemberment Insurance; Group Long Term Disability EXHIBITS THE FOLLOWING ATTACHED EXHIBITS HEREBY ARE MADE PART OF THIS AGREEMENT: See Attachment A INSURANCETERM THE~[B~i~t~AND/ORMATERIALSFORNISHEDUNDERTHISAGREEMENTSHALLCOMMENGEoNthe "Effective Date"of A~D~X~ ~in accordance with Attachment B for a one June I, 2003, year initial term and two optiona! one vear renewal termsCOMPENSATION FORTHEFULLPERFORMANCEOFTHISAGREEMENT: to be ~xercise~a%_~i~y’s option in accoreance wl~n .b~’~ ~ [] CITYSHALLPAYCONTRACTOR:in accordance with-Exhibit "i" to Attachment B to this contract in a sum n~t tQ exceed $700,000 per yea~,~8_ubCON_RACTOR~HAL ....tothe provisions oZ Attacnmen~ C (non-approprlatlQ~laQt 3ec~ provlde Insurance Benefits ~n accordance w~th Attachment B. ~u,~u~. PAYMENT RECORD. (DEPARTMENT USE REVERSE SIDE) CITY ACCOUNT NUMBER: KEY CODE OBJECT PROJECT PHASE NO. I DOLLAR AMOUNT GENERAL TERMS AND CONDITIONS ARE INCLUDED ON BOTH SIDES OF THIS AGREEMENT. THIS AGREEMENT SHALL BECOME EFFECTIVE UPON ITS APPROVAL AND EXECUTION BY CITY. IN WITNESS THEREOF, THE PARTIES HAVE EXECUTED THIS AGREEMENT THE DAY, MONTH, AND YEAR FIRST WRITTEN ABOVE. HOLD H~RMLESS. CONTRACTOR agrees to indemnify, defend and hold harmless CITY, its Council Members, officers, employees, and agents from any and all demands, claims or liability of any nature, including wrongful death, caused by or arising out of CONTRACTOR’S, its officers’, directors’, employees’ or agents’ negligent acts, errors, or omissions, or willful misconduct, or conduct for which the law imposes strict liability on CONTRAOTOR in the performance of or failure to perform this agreement by CONTRACTOR. ENTIRE AGREEMENT. This agreement and th~ terms and conditions q.n the revers~ herbal represent the entire agreement between the parties with respect to the purchase and sale of the goods, equipment, materials or supplies or payment for services which may be the subject of this agreement. AI! prior agreements, representations, statements, negotiations and undertakings whether oral or written are superseded hereby. PROJECT MANAGER AND REPRESENTATIVE FOR CITY CONTRACTOR NAME BY DEPT.TITLE P.O. BOX 10250 PALO ALTO, CA 94303 Telephone SOCIAL SECURITY OR I.R.So NUMBER INVOICING SEND ALL INVOICES TO THE CITY, ATTN: PROJECT MANAGER CITY OF PALO ALTO APPROVALS: (ROUTE FOR SIGNATURES ACCORDING TO NUMBERS IN APPROVAL BOXES BELOW) CiTY DEPARTMENT 1---] Funds Have Been~ Budgeted (1) APPROVAL OVER $25.000 CITY OF PAL0 ALTO BY’ASSISTANT CITY MANAGER INSURANCE REVIEW (2) BYi MAYOR PURCHASING & CONTRACT ADMIN STRATION (3)APPROVAL OVER $65,000 AFIEST:.APPROVED AS TO FORM: CITY CLERK ClTh" ATTORNEY THiS AGREEMENT lS LIMITED TO THE TERMS AND CONDITIONS ,ON THE FACE AND BACK HEREOF WHICH INCLUDES ANY ~’,H!BiTS REFERENCED. ~u L,’=~,~,,:,~ LAW. THIS AGREEivIENT SHALL BE GOVERNED BY THE LAWS OF THE STATE OF CAL!FORN!A. ;NTE~ EST OF CONTRACTOR. ~T }S UNDERSTOOD AND AGREED THAT THIS AGREE~/iE.NT iS NOT A CONTRACT OF EMPLOYMENT tN THE SENSE THAT THE RE,LAT!QN OF MASTER AND SERVANT EXISTS B~$v’EEN THE C~TY AND UNDERSIGNED. AT A!_L TIMES CONTRACTOR SHALE BEDEEMED TO BE AN ~NDEFENDENT CONTRACTOR AND CONTRACTOR S NOT AUTHORIZED TO BIND CITY TO ANY CONTRACTS OR OTHER OBL!GAT]ONS. IN ~XECUTING THIS AGREEMENT, CONTRACTOR CERTIFIES THAT NQ ONE WHO HAS OR WILL HAVE ANY F]NANC!AL iNTEREST UNDER THIS AGREEMENT IS AN OFFICER OR EMPLOYEE QF C!TY. ![~SUR-’.A~O~, CONTRACTOR AGREES TO PROVIDE THE INSURANCE SPECIFIED IN THE ’qNSURANCE REQUIREMENTS" FORM ISSUED HEREWITH. iN THE WENT SELLER !S UNABLE TO SECURE A POLICY ENDORSEMENT NAMING THE CITY QF PALO ALTO AS AN ADD!TIONAL INSURED UNDER ANYCOMPREHENSIVE GENERAL UABILiTY OR COMPREHEiqSIVE AUTOMOBILE FOL!CY OR POUCIEB. CONTRACTOR SHALL AT A MINIMUM, AND ONLY W!TH THE WRITTEN APPROVAL OF CITY’S !:{~SK MANAGER OR DESIGNEE. CAUSE EACH SUCH iNSURANCE POLICY OBTAINED BY IT TQ CONTAIN AN ENDORSEMENT PROVIDING THA.T THE INSURER WAIVES ALL RIGHT OF RECOVERY BY WAY QF SUBROGATION AGA!NST CITY, ITS OFFICERS. &GENTS AND EMPLOYEES :’! CONNECTION WITH ANY DAMAGE, C,"AiM. LIABiLiTY PERSONAL iNJURY. SR WRCNGFU_ DEATH COVERED Bv" ANY SUCH POLiC’~. EACH SOCH POL!CY OBTAINED BY CONTRACTOR SHALL CONTAIN AN ENDORSEMENT REQUIRING THIRTY, [30’~ DAYS’ WRITTEN NOTICE FROM THE INSURER TQ CITY BEFORE CANCELLATION OR CHANGE IN THE COVERAGE. SCOPE OR AMOUNT QF SUCH PQUCY. CONTRACTOR SHALL PROVIDE CERTIFICATES OF SUCH PQLICIFLS OR OTHER EVIDENCE OF COVERAGE SATISFACTORY TQ ClsFY’S RISK MANAGER, NON-DISCRIf~_’]!NATION. ~,~o DISCRIMINATION SHALL BE MADE IN THE EMPLOYMENT OF PERSONS UNDER THIS AGREEMENT BECAUSE OF THE RACE. COLOR, NATIONAL ORIGIN. AGE. ANCESTRY, RELIGION OR SEX OF _ SUCH.PERSON. WAR~NTY. COMPACTOR EXPRESSLY WARRANTS TH, AT ALL MATERIALS AND SERVICES CCVERED B’t THIS AGREEMENT SHALL CONFORM TO THE SPECIF.ICAT~ONS, REQUIREMENTS. INSTRUCTIONS. OR. OTHER DESCRIP- TIONS UPON WHICH THIS AGREEMEN~ IS BASED~ SHA~L BE FI3i AND SUFFICIENT FOR THE PURPOSE INTENDED. OF GOOD MATERIAL-AND WQR,~(MANSHIP AND FREE FROM DEFECT AND THAT MATE,~I,-e;LS AND SERVICES QF CONTRACTOR’S DESIGN WILL BE ~REE FROM DEFECT IN DESIGN. INSPECTION. TEST. ACCEPTANCE~ PAYMENTQR USE OF THE GOODS FURNISHED HEREUNDER SHALL blOT AFFECT THE CONTRACTOR’S OBLIGATION UNDER THIS WARRANqi~’. AND SUCH WARRANTIES SHALL SURVIVE INSPECTION. TEST ACCEPTANCE AND USE. CONTRACTOR AGREES TO REPLACE. RESTORE. OR CORRECT DEFECTS OF ANY MATERIALS OR SERVICES NOT CONFORMING TO THE FOREGOING WARRANT’{ PROMPTLY, WITHOUT EXPENSE TO CITY.. WHEN NOTIFIED OF SUCH NONCONFORMITY BY: CITY’. !N THE ~/ENT OF FAILURE BY CONTRACTOR TO CORRECT DEFECTS IN OR REPLACE NONCONFORMING GOODS QR SERVICES PROMPTLY’~ CITY, AFTER REASONABLE NOTICE TO CONTRACTOR, MAY MAKE SUCH CORRECTIONS OR REPLiACE SUCH MATERIALS QR SERVICES AND CHARGE CONTRACTOR FOR THE COST INCURRED B",~ THE CITY, THEREBY. WORKERS’ CO~’IPENSAT!ON. C~NTR,~.CTOR, ,BY EXECUTING THIS AGREEMENT. CERTIFIES THAT-!T IS AWARE OF THE PROVISIONS OF TH~ ~, C~,_~ ~ , ~A WHICH REQUIRE EVERYLABOR CODE OF THE STAT~ £L’iPLOY~R TO BE INSURED ~GAJNST L;AB~LITY FOE WORKERS’ COMPENSATION QR TO UNDERTAXESELF-!NSURANCE IN ACCORDANCE W!TH THE PROVISIONS OF THAT CODE, AND CERTIFIES TN~T ~T WILL COMPLY WITH SUCH PROVISIONS BEFORE COMMENCING~ PER~dRMANCEOF THE WORK OF THIS AGREEMENT. PRICE TERMS. TOGETHER WITH EVIDENCE OF PAYMENT OF PREMiUMS:. TO CtTY AT THE-(8~EXTRACHARGES. INVOICES AND PAYMEnt: NO EXTRA CHARGES OF ANY COMMENCEMENT OF THIS AGREEMENT. AND ON RENEWAL OF THE POLICY,KIND WILL BE ALLOWED UNLESS SPECIFICALLy AGREED TO 11.t WRITING BYOR POLICIES NOT LATER THAN qq,.’VENTW((20) DAYS BEFORE EXPIRATION OF Ch’-Y. ALL STATE AND FEDERAL ~CISE. SALES AND USE ]TAX~S SHALL BETHE TERMS OF ANY SUCH POLICY.STATED SEPARATELY ON THE INVOICES .........: .......: (b) TRANSPORTAT!ON CHARGES. ANY TRANSPORTATION-CHARGES WITH TER.~a|NAT~ON. THIS AGRE@~ENT M,~Y BETER,~,~INATE~ BYCITY uPON-" RESPECT TO WHICH CONTRACTOR IS ENTITLED TO RECEIVE TEN {.10) DAYS WRITTEN NOTICE TO CONTRACTOR.- MONIES THEN OW|NGREIMBURSEMENTSHALL BE ADDED TO CONTRACTOR’S-INVOICE-AS A BASED UPON WORK SATISFAC.TORILY AC_COM~LISHED SHALL BE PAID.TO . S~gARATE I~EM, W[THTI-,~EREOmJPTED FREIGHT BILLA’ETAC~ED THEP, ETO. - CONTR, ACTOR. - CHANGES. THIS AGREEMEi~IT SHAL[~ NOT BEAS.SIGNEDOR :TRANSPERRED WITHOUT THE WRITTEN CONSENT OF THE CITY, NO CHANGES OR VARIATIONS OF AN’,/ KIND ARE AUTHORIZED-WITHOUT THE WRITTtEN CONSENT OF THE CITY MANAGER, " " : : " AUDITS. CONTRACTOR AGREES TO PERMIT CITY TO AUDIT, AT ANY REASONABLE TIME DURING THE TERM OFTHIS AGREEMENT AND FOR THREE .(c) CONTRACTOR WARRANTS THAT TN...’~E PRICES FOR MATERI~LS OB SERVICES SOLD TO CITY UNDER TH!S AGREEMENT ARE NO [ i[ESS FAVORABLE THAN THQ_SE_ CURRENTLY E~.TENDED- TO--ANY OTHER CUSTOMERS OF THE SAME OR LIKE ARTICLES OR SERVICES,,~NEQUAL OR LESS QUANTITIES. IN EVENT CONTRACTOR REDUCES ITs PF~iCE FORSUCH MATERIALS OR SEN-VICES DURING THE TERM OF THIS AGt~EEMENT, CONTRACTOR AGREES TO REDUCE THE PRICES OR P~T~SHEREOF: CORRESPONDINGLY. .. :~ .: -D-’...,V,.,, ~Y. 1 l[v.~ IS OF THE ESSENCE OF THIS(3) ’{EARS THEREAFTER. CONTRACTOR’S RECORDS PERTAINING TOSCHEDULES OR ~=’ ; "=-~ - ~= MATTERS COVERED BY THIS AGREEMENT. CONTrACtOR rUN!HER ,-,,~REESAGREEMENT. CONTRACTOR AGREES TO COMPLY WITH THE SPECIFIC TO MAINTAIN SUCH RECORDS FOR AT LEAST THREE (3) YEARS AF,F,F,F,F,F,F,F,F,FT~R THE SCHEDULE PROVIDED B’{ THE CiTY OR AGREED. UPON HEREIN WITHOUT TERM OF -t H,b ~ ,,..,GR~r,~F;T." ==’~= ’DELAY AND WITHOUT ANTICIPATING CITY’S REQUIREME[’,rTS. CONTRACTOR ALSO AGREES NOT TO MAKE MATERIAL COMMFTMENTS QR SCHEDULING ¯~,~ .,~ lV.=.~"ARRANGEMENTS IN EXCESS-OF THE REQUIRED AMOUNT’OR IN ADVANCE OFNO J[’~JPL~:---D ~.’~,~ ....NO PAYMENT, PARTIAL PAYMENT. ACCEPTANCE. OR PARTIAL ACCEPTANCE BY CITY SHALL QPERA, TE AS A WAIVER QN THE TH, TtlvIE NECESSARY TO MEET THE SCHEDULE(S) OF THIS AGREEMENT, IF PART OF CIT~ OF ANY OF iTS RIGHTS UNDER THIS AGREEMENT.ANY._ .......----. CITY’S PRm~r-RTY, ~, _, . TITLE TO CITY’S PROPERTY FURNISHED TO CONTRACTOR SHALL REMAIN IN THE CITY. CONTRACTOR SHALL NOT ALTER OR USE pP~r~p=mTy’ FOR ANY PURPOSE, OTHER TH.<N THAT SPECIFIED BY C!TY_ OR FOR ANY OTHER PERSON VVITHOUT THE PRIOR WRITTEN CONSENT OF CITY. CONTRACTOR SHALL STORE. PROTECT. PRESERVE, REPAIR AND MAINTAIN SUCH PROPERT’f IN ACCORDANCE WITH SOUND PROFESSIONAL PRACTICE. ALL AT CONTRACTOR’S EXPOSE. TRANSPORTATION, PACKAGING & LABEL!NG. ALL MATERIALS OR SERVICES ARE TO BE =ROVIDED: (a) F.O.B. PALO ALTO-UNLESS OTHERWISE SPECIF ED.~ (b) WITH A PACKING LIST ENCLOSED IN CARTONS. WHICH R,~DICATE THE AGREEi’dENT NUMBER, EXACT QUANTITY AND DESCRIPTIONS, CONCERNING ANY MATER]AL SHIPMENTS.: (c} AND COMPLY WITH CURRENT PACKAGING AND LABELING REQUIREMENTS PRESC]~IBED I~Y D.O.T.~" " - Warrant No.Date Amount (~) (2) (4)." ...... (5)-- (6)- - ATTACHMENT ~A" EXHIBITS TO AGREEMENT: ATTACHMENT "A" ATTACHiVlENT "B" Exhibit "i" Exhibit "2" ATTACHMENT "C" ATTACHMENT "D" ATTACHMENT EXHIBITS TO AGREEMENT METLIFE GROUP TERM LIFE AND ACCIDENT AND HEALTH INSURANCE POLICY SCHEDULE OF PREMIUM RATES CERTIFICATE FORMS ADDITIONAL TE~S ~D CONDIT!ONS NON-DISCRIMINATION CERTIFICATE INSURANCE REQUIREMENTS 030508 sdl 7060619 Attachment B MetL|f4 Metropolitan Life Insurance Company One Madison Avenue, New York, New York 10010-3690 Metropolitan Life Insurance Company ("MetLife"), a stock company, will pay the benefits specified in the Exhibits of this policy subject to the terms and provisions of this policy. The Schedule of Exhibits lists each Exhibit to this policy, to whom it applies and its effective date. Policyholder:City of Palo Alto Group Policy No.:109701-1-G EFFECTIVE DATE This policy will take effect on June 1,2003. POLICY ANNIVERSARIES Policy anniversaries will be June 1, 2004 and each subsequent June First. PREMIUM PAYMENTS This policy is issued in return for the payment by the Policyholder of required Premiums. Premiums are payable at the home office of MetLife or to its authorized agent. The first Premium is due on and must be paid by this policy’s effective date. Any later Premiums are due monthly-in advance on the first day of each Policy Month. These dates are the Premium Due Dates. POLICY SITUS This policy is issued for delivery in and governed by the laws of California. Signed as of this policy’s effective date at MetLife’s home office in New York, New York. Gwenn L Cart Vice President and Secretary Robert H. Benmosche Chairman, President and Chief Executive Officer Signed by (A MetLife licensed agent or resident agent as required by law.) Date THIS POLICY IS NOT IN LIEU OF AND DOES NOT AFFECT ANY REQUIREMENTS FOR WORKERS’ COMPENSATION INSURANCE. GROUP TERM LIFE AND ACCIDENT AND HEALTH INSURANCE POLICY NON-DIVIDEND PAYING GPNP99 109701-1-G Page 1 TABLE OF CONTENTS Section Page POLICY FACE PAGE 1Effective Date ................................................................................................................................... Policy Anniversaries .................................... ......................................................................................1 Premium Payments ..........................................................................................................................1 Policy Situs ......................................................................................................................................... DEFINITIONS .......................................................................................................! ........................................4 SCHEDULE OF INSURANCE ......................................................................................................................5 ELIGIBILITY AND EFFECTIVE DATES OF INSURANCE ....." ......................................................................5 CONTRIBUTIONS .......................................................... PREMIUM RATE(S) Initial Rate(s) ........... ..........................................................................................................................5 5Frequency of Premium Payment .............................................................................: ....................... Computation of Premium ..................................................................................................................5 Premiums for Changes in insurance .................................................................................................5 Right to Change Premium Rates ......................................................................................................6 7GRACE PERIOD ........................................................................................................................................... END OF INSURANCE PROVIDED BY THIS POLICY ................................................................................... 7 8REINSTATEMENT .................................................................................................................... . .................... GENERAL PROVISIONS Entire Contract .................................................................................................................................8 Policy Changes or Waivers ...............................................................................................................8 Incontestability: Statements Made by the Policyholder .....................................................................8 Incontestability: Statements Made by Covered Persons ...................................................................8 9Certificates .......................................................................................................................................9Assignment ......................................................................................................................................9Data Needed .................................................................................................................................... Misstatement of Age .........................................................................................................................~Non-Dividend Paying ........................................................................................................................ Conformity with Law ..........................................................................................................................9 SCHEDULE OF EXHIBITS ............................................................................................SCH/EXHIBITS EXHIBIT 1: Schedule of Premium Rates .....................................................................EXHIBIT1 EXHIBIT2EXHIBIT 2: Certificate Forms ...................................................................................... GPNP99 109701-1-G Page 2 DEFINITIONS As used in this policy, the terms listed below will have the meanings defined below. When defined terms are used. in this policy, they will appear with initial capitalization. The plural use of a term defined in the singular will share the same meaning. Contribution means the amount the Policyholder may require the Employee to pay towards the total Premium that MetLife charges for the insurance provided by this policy. Contributory Insurance means insurance for which the Policyholder may require the Employee to pay at least part of the Premium. Covered Person means an Employee and/or a Dependent as set forth in the Exhibit which applies to the Employee. Employee is defined in the Exhibit which applies to the Employee. Employer means the Policyholder shown on page 1. Noncontributory Insurance means insurance for which the Policyholder may not require the Employee to pay any part of the Premium. Policy Anniversary is defined on page 1. Policy Month. The first Policy Month will begin on the effective date shown on page 1. Subsequent Policy Months will begin on the same day of each subsequent calendar month. Premium means the amount the Policyholder must pay to MetLife for all the insurance provided under this policy. Premium Due Date is defined on page 1. Signed means any symbol or method executed or adopted by a person with the present intention to authenticate a record, and which is on or transmitted by paper or electronic media, and which is consistent with applicable law. Written or Writing means a record which is on or transmitted by paper or electronic media, and which is consistent with applicable law. GPNP99 109701-1-G Page 3 SCHEDULE OF INSURANCE The Schedules of Insurance which apply under this policy are set forth in the Exhibits. ELIGIBILITY AND EFFECTIVE DATES OF INSURANCE The Eligibility and Effective Dates of Insurance provisions that apply under this policy are set forth in the Exhibits. CONTRIBUTIONS The Policyholder will not require an Employee to contribute to the cost of Noncontributory Insurance. The maximum amount that an Employee may be required to contribute to the cost of Contributory Insurance will not exceed the Premium charged for the amounts of such insurance. PREMIUM RATE(S) Initial Rate(s) The initial Premium rate(s) are shown in Exhibit 1. Frequency of Premium Payment Premiums for this policy will be paid as shown on page 1. MetLife and the Policyholder may agree that payment be made in advance every 3, 6 or 12 months. Computation of Premium The Premium due on any Premium Due Date is determined by the total amount of insurance provided by this policy on such Premium Due Date, multiplied by the appropriate Premium rate(s) which are then in effect subject to any Premium adjustments, if applicable. MetLife may use any reasonable method to compute Premiums due under this policy. Premiums for Changes in Insurance For insurance that takes effect after the first day of a Policy Month, Premium will be charged from the first day of the next Policy Month. However, if a policy amendment or evidence of good health is required for such insurance, Premium will be charged as of the date such insurance takes effect. If this policy ends, or if insurance ends for a class of persons, Premium will be charged to the date insurance ends. If insurance ends for other reasons, Premium will be charged to the end of the Policy Month in which insurance ends. GPNP99 109701-1 -G Page 4 PREMIUM RATES (Continued) Right to Change Premium Rates MetLife may change Premium rates for changes which materially affect the risk assumed for the insurance provided by this policy, as follows: 1.when this policy is amended or endorsed; 2.when a class of eligible persons is added to or deleted from this policy for any reason including corporate restructuring, acquisition, spin-off or similar situations; 3.when a Policyholder’s subsidiary, affiliate, division, branch or other similar entity is added to or deleted from this policy for any reason including corporate restructuring, acquisition, spin-off or similar situat ons; 4.when there is a significant change in the geographic distribution of insured Employees; 5.when applicable law requires a change in: the insurance provided by this policy; and/or the class of persons eligible for insurance under this policy; or when a Premium Due Date coincides with or next follows: a.a change greater than 10% in the number of Covered Persons since the later of the policy Effective Date and the last date Premium rates were changed; or b.a change greater than 10% in the amount of insurance provided by this policy since the later of the policy Effective Date and the last date Premium rates were changed. GPNP99 109701-1 -G Page 5 GRACE PERIOD Each Premium due after the effective date of this policy may be paid up to 31 days after its Premium Due Date. This period is the grace period. The insurance provided by this policy will stay in effect during this period. MetLife will notify the Policyholder in Writing that, if the Premium is not paid by the end of the grace period, this policy will end at the end of the last day of the grace period. If MetLife fails to give Written notice to the Policyholder, this policy will continue in effect until the date such notice is given. Policyholder’s intent to end this policy during the grace period. The Policyholder may notify MetLife in Writing prior to the end of the grace period of its intent to end this policy before the end of the grace.period. In this case, this policy will end on the later of: 1. the date stated in the notice; or 2. the date MetLife receives the notice. If the Policyholder replaces this policy with another group insurance policy but does not give MetLife notice of intent to end this policy, the grace period provisions will apply. Grace period extensions. MetLife may extend the grace period by giving Written notice to the Policyholder. Such notice will state the date this policy will end if the Premium remains unpaid. Premiums must be paid for a grace period, any extension of such period and any period insurance under this policy was in effect for which Premium was not paid. END OF INSURANCE PROVIDED BY THIS POLICY 10 The Policyholder can end this policy by giving ~days advance Written notice to MetLife. The policy will end on the later of: 1. the date stated in the notice; or 2. the date MetLife receives the notice. MetLife can end this policy as follows: ..... 1.on the date Premium is not paid when due, subject to the Grace Period provisions; or 2.on any Premium Due Date, by giving the Policyholder 31 days advance Written notice, if tess than: a.75% of persons eligible under this policy are insured for Contributory Insurance; b.100% of persons eligible under this policy are insured for Noncontributory Insurance; or c.for Long Term Disability Benefits, 10 Employees are insured by this policy; for all other insurance provided by this policy, 50 Employees are insured by this policy; or 3. on any Premium Due Date, by giving the Policyholder 60 days advance Written notice, if the Policyholder fails to provide information on a timely basis or perform any obligations required by this policy or any applicable law; or 4.on any Policy Anniversary, except during a Rate Guarantee Period as may be provided in Exhibit 1, by giving the Policyholder 31 days advance Written notice. GPNP99 109701-1-G Page 6 END OF INSURANCE PROVIDED BY THIS POLICY (Continued) This policy will end on the date on which the last certificate in effect under this policy ends. If this policy ends, all Premiums due must be paid. If MetLife accepts Premium after the date this policy ends, such acceptance will not act to reinstate the policy. MetLife will refund any unearned Premium. REINSTATEMENT The Policyholder may request to reinstate this policy within one year from the date it ended. The request must be in Writing and it must provide MetLife with information that MetLife requires to consider such request. If MetLife approves the request, the policy will be reinstated on the date stated in Writing by MetLife. GENERAL PROVISIONS Entire Contract. The entire contract is made up of the following: 1.this policy, including its Exhibits; 2.the Policyholder’s application; and 3.the amendments and endorsements to this policy, if any... ......~ when required by 4. Agreement # between City and -~e’c.L,]-ze-~,’~ law Policy Changes or Waivers. The terms and provisions of this policy may be changedfa’~any time, without the consent of the Covered Persons or anyone else with a beneficial interest in it. MetLife will issue amendments or endorsements to effect such changes. MetLife will only make changes that are ~ req-~ired ~ applicable law. An amendment or endorsement will not affect the insurance provided under certificates byissued before the effective date of the change, unless retroactivity is ~ applicable law. required by~and City ¯ An officer of Methife~must approve in Writin~ any change or waiver of the terms and provisions of this policy. A sales representative, or other MetLife employee, who is not an officer of MetLife does not have MetLife’s authority to approve such changes or waivers. A change or waiver will be evidenced by an amendment Signed by an officer of MetLife and the Policyholder or an endorsement Signed by an officer of MetLife. A copy of the amendment or endorsement will be Provided to the Policyholder for attachment to this policy. Incontestability: Statements Made by the Policyholder. Any statement made by the Policyholder will be considered a representation and not a warranty. MetLife will not use such statement to avoid insurance, reduce benefits or defend a claim unless it is contained in a Written application. MetLife will not use such statement to contest life insurance after it has been in force for 2 years from its effective date, or date of last reinstatement, unless the statement is fraudulent. Incontestability: Statements Made by Covered Persons. Any statement made by a Covered Person wilt be considered a representation and not a warranty. MetLife will not use such statement to avoid insurance, reduce benefits or defend a claim unless the following requirements are met: 1.the statement is in a Written application or enrollment form; 2.the Covered Person has Signed the application or enrollment form; and 3.a copy of the application or enrollment form has been given to the Covered Person or his beneficiary. MetLife will not use a Covered Person’s statements which relate to insurability to contest life insurance after it has been in force for 2 years during his life, unless the statement is fraudulent. In addition, MetLife will not use such statements to contest an increase or benefit addition to such insurance after the increase or benefit has been in force for 2 years during his life, unless the statement is fraudulent. Certificates. MetLife will issue individual certificates to the Policyholder for delivery to each Covered Person, as appropriate. Such certificate will describe the Covered Person’s benefits and rights under this policy. "Certificate" includes any of MetLife’s insurance riders, notices or other attachments to the certificate. Assignment. The rights and benefits under this policy are not assignable prior to a claim for benefits, except as required by law or as permitted by MetLife.GPNP99 109701-1-G Page 7 GENERAL PROVISIONS (Continued) Data Needed. The Policyholder will provide MetLife with all the data needed to compute Premiums and carry out the terms df this policy. MetLife may examine such data at any reasonable time. If MetLife or the Policyholder make a clerical error in keeping the data, the Premium and/or benefits will be adjusted according to the correct data. An error will not end insurance validly in effect, nor will it continue insurance validly ended. Misstatement of Age. If a Covered Person’s age is misstated, the correct age will be used to determine if insurance is in effect and, as appropriate, adjust the Premium and/or benefits. , Non-Dividend Paying. This policy does not pay dividends. Conformity with Law. If the terms and provisions of this policy do not conform to any applicable law, this policy shall be interpreted to so conform. GPNP99 109701-1-G Page 8 SCHEDULE OF EXHIBITS Exhibit Number Exhibit Type Applies To Effective Date Schedule of Premium Rates 2 Certificate Forms All Covered Persons All Covered Persons June 1, 2003 June 1, 2003 GPNP99 109701-1 -G SCH/EXHIBITS DATE: June 1, 2003 EXHIBIT 1 SCHEDULE OF PREMIUM RATES The initial monthly Premium rates for the insurance pr.ovided by this policy are as follows: Rate Guarantee Period : ~-’-" the Basic Life, Optional Life, Accidental Death and Dismemberment and Optional Accidental Death and Dismemberment Premium rates will be in effect for the period which begins on June 1, 2003 and ends on May 31, 2006. Basic Life Benefits for Employees: - $0.19 per $1,000 of Basic Life Benefits in force hereunder. Optional Life Benefits for Employees: - $0.27 per $1,000 of Optional Life Benefits in force hereunder. Accidental Death or Dismemberment Benefits for Employees: - $0.03 per $1,000 of the Full Amount of Accidental Death or Dismemberment I~enefits for Employees. Optional Accidental Death or Dismemberment Benefits for Employees: - $0.03 per Sl,000 of the Full Amount of Optional Accidental Death or Dismemberment Benefits for Employees. Long Term Disability Benefits: - Plan A - $1.15 per $100 of Total Insured Payroll. Long Term Disability Benefits: - Plan B - $0.58 per $100 of Total Insured Payroll. Long Term Disability Benefits: - Plac C - $0.67 per $100 of Total Insured Payroll. The monthly premium rate shall be calculated based on City’s prior month’s "Employee salary." GPNP99 EXHIBIT1 109701’1-G DATE: June 1, 2003 - EXHIBIT 2 CERTIFICATE FORMS Certificate Number 1 2 Certificate Form [Insert name of certificate] [Insert name of certificate] Applies To All Covered Persons All Covered Persons Effective Date June 1,2003 June 1,2003 G PNP99 109701-1 -G EXHIBIT2 DATE: June 1, 2003 CERTIFICATE FORUMS COPIES OF THE CERTIFICATES CAN BE OBTAINED CONTACTING THE RISK MANAGER 650) 329-2588 030508 sdl 7060619 ATTACHMENT "~C" Additional Contract Terms and Conditions Nonappropriation of Funding: This Contract is subject to the fiscal provisions of the Charter of the City of Palo Alto and the Palo Alto Municipa! Code. This Contract wil! terminate without any penalty (a) at the end of any fiscal year in the event that funds are not appropriated for the following fiscal year, or (b) at any time within a fiscal year in the event that funds are only appropriated for a portion of the fisca! year and funds for this Contract are no longer available. This section shal! take precedence in the event of a conflict with any other covenant, term, condition, or provision of this Contract. 030508 sdl 7060619 Attachment "D" Certification of Nondiscrimination As suppliers of goods or services to the City of Palo Alto, the firm and individuals listed below hereby certify: a)that they are currently in compliance with all federal and state ’,of California laws covering nondiscrimination in employment; and b) that, if awarded the contract, the proposer will not discriminate in employment of any person under the contract because of race, color, national origin or ancestry, religion, disability, gender or marital status of such person. THE INFORMATION HEREIN IS CERTIFIED CORRECT BY SIGNATURES) BELOW. Firm: Metropolitan Life Insurance Company (MetLife) Signature: Name: Anthony J. Nugent, Regional Vice President PRINT OR TYPE NAME) Signature:! Name: Note: Ja (PRINT OR TYPE NAME) Cafifornia Corporations Code Section 313 requires two corporate officers to execute contracts. *The signature of First Officer" must be one of the following: Chairman of the Board; President; or Vice President. **The signature of the Second Officer" must be one of the following: Secretary; Assistant Secretary; Chief Financial Officer, or Assistant Treasurer. (In the alternative, a certified corporate resolution attesting; to the signatory authority of the individuals signing in their respective capacities is acceptable) Attachment "E" INSURANCE REQUIREMENTS To be obtained by Risk Management at a later date.