Health Net 2009 Annual Report Download - page 488

Life’s sole cost and expense, shall be responsible for all non-renewal and cancellation notifications and other requirements under
applicable Law with respect to the HN Life Health Plan Contracts, HN Life Employer Groups and the Membership, including those
notifications and other requirements required in the event that the Legacy United Entities choose not to enroll any HN Life Employer
Group or Member upon expiration of the applicable HN Life Health Plan Contract. United and HN Life agree to cooperate with each
other with respect to the timing and content of such non-renewal and, if requested, cancellation notifications to the Membership in
order to facilitate HN Life’s fulfillment of its legal obligations with respect to the Membership.
ARTICLE IV.
ADDITIONAL COVENANTS
Section 4.1. Rates.
(a) United shall have sole authority for: (i) developing the rates for Legacy United Entities’ Plans; (ii) if and to the extent
required by applicable Law, obtaining approval from the appropriate Governmental Entities for the rates and other terms of the
Legacy United Entities’ Plans and of any activities of United related to the transition of HN Life Employer Groups and
Members or otherwise in connection with the transactions contemplated hereby; (iii) utilizing such rates to calculate premiums
according to established underwriting guidelines, as such guidelines are applied by United in a manner consistent with United’s
application thereof to business other than the Business, for Legacy United Entities’ Plans in compliance with applicable Law;
(iv) subject to the provisions of Sections 2.2(b), 3.1, 3.2, 3.3 and 4.5 hereof, soliciting, marketing to, and otherwise contacting
Brokers, Consultants and HN Life Employer Groups with regard to Legacy United Entities’ Plans; and (v) negotiating the terms
of all Legacy United Entities’ Plans.
(b) Notwithstanding the foregoing, for any Members renewed on HN Life Health Plan Contracts, whether under
guaranteed renewable HN Life Health Plan Contracts or as otherwise required by applicable Law, HN Life shall have sole
authority for determining applicable rates.
Section 4.2. Cessation of Renewals. From and after the Effective Date, with respect to each HN Life Health Plan Contract, HN
Life shall cease renewing such contracts as soon as allowable by applicable Law, except (i) for new or renewal contracts arising from
quotations outstanding as of the Effective Date; provided that the effective date for such new or renewal contracts is not later than
ninety (90) days after the Effective Date, or (ii) with respect to those insurance contracts that are guaranteed renewable such that they
cannot, by their terms or under applicable Law, be terminated at such time by notice from, or by other unilateral action initiated or
taken by, HN Life (the “Renewal Contracts”). HN Life shall determine the applicable fees or rates and term of such required renewal,
and unless otherwise agreed by the Parties, any such required renewal by HN Life shall be renewed for a term that is limited to the
minimum requirements of such guarantees or applicable Law.
10