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<br />27 <br /> <br /> <br />BENEFIT <br /> <br />T~UST <br /> <br />LIFE <br /> <br />INSURANCE COMPANY <br /> <br />A M U T U ALL E GAL RES E R V E COM PAN Y <br />BENEFIT TRUST LIFE BUILDING" 1 771 HOWARD STREET. CHICAGO, ILLINOIS 60626-1695 .. PHONE 13121 274-8100 <br /> <br />LETTER OF AGREEMENT <br /> <br />CITY OF SAN MARCOS <br />San Marcos, Texas <br /> <br />Re: <br /> <br />Reserve Obligation for Insurance Plan <br /> <br />Under any medical insurance plan a reserve fund must be established for the <br />purpose of paying claim runoff in the event of termination of the Contracts. <br /> <br />When the Minimum Premium arrangement was entered into effective January 1, 1987 <br />between the City of San Marcos and Benefit Trust Life Insurance Company, the City <br />of San Marcos decided that in lieu of paying the reserve component of the medical <br />premium, they would pledge to Benefit Trust Life an initial arrount of $84,000 in <br />the form of a Certificate of Deposit issued by University Savings of San Marcos. <br /> <br />During the last insurance renewal process, it was determined that it would be <br />necessary to increase the reserve component of the medical premium effective <br />January 1, 1988, consequently, Benefit Trust Life requested that the pledge <br />arrount be increased to $101,902. <br /> <br />Since the arrount requested is an estimate of the true arrount required (which could <br />vary as result of enrollment) as an accorrmodation to the City, Benefit Trust Life <br />agreed to accept the pledge of the existing Certificate of Deposit plus accrued <br />interest of $7,153.06 for a total of $91,153.06 to use as security in place of <br />the required reserves. <br /> <br />When the plan terminated and University Savings of San Marcos was asked to remit <br />the entire arrount of $91,153.06, they correctly acknowledged only an obligation <br />on their part of $84,000, which was the arrount of the original Certificate of <br />Deposit. <br /> <br />Consequently, in accordance with agreements reached during the past renewal <br />negotiations, I am requesting that the City of San Marcos remit a check, to me, <br />made payable to Benefit Trust Life Insurance Company for the balance of $7,153.06. <br /> <br />A final accounting will be given approximately one year from the date of <br />termination. Any unsued monies after covering Claims Incurred prior to the <br />termination date and any deficits will be returned to the City of San Marcos. <br /> <br />44?~ <br /> <br /> <br />Group Underwriting <br /> <br /> <br />For: <br />