Health Net 2009 Annual Report Download - page 528

(c) [The parties acknowledge and agree that this Agreement shall be subject to the requirements of N.J. Rev. Stat. 17B-
27B-6 as set forth in the provisions of the Agreement and in the provisions of attached Addendum 1, which is incorporated herein by
reference as if fully set forth herein. The provisions of Addendum 1 shall prevail over any provision in the Agreement which may
conflict or appear inconsistent with any provision in the Addendum.]
Section 3.4. Subcontracting.
(a) The Administrator shall not subcontract the performance of (a) any Management Function or (b) any Administrative
Services pursuant to an Administered Contract with annual estimated expenditures with respect to the Acquired Business of at least
$200,000 to another Person (the “Subcontractor”) (each of (a) or (b), a “Material Subcontract”) without the prior written consent of
Company (which consent shall not be unreasonably withheld, conditioned or delayed); provided, however, that in any case, the
Company’s consent will not be required (i) if the applicable subcontractor is an Affiliate of the Administrator, (ii) if the Administrator
or any of its Affiliates subcontracts an Administrative Service in connection with a program undertaken by Parent or any of its
Affiliates substantially on a nationwide basis or (iii) for the subcontracting of any information technology (other than in the case of
this clause (iii), information technology supporting Claims processing activities), telephone or similar operations or services. In the
event that the Company consents to any such subcontracting, the Administrator shall not be relieved from any of its obligations or
liabilities hereunder, including compliance with Law and maintenance of proper licensure, and the Administrator shall remain
responsible for all obligations or liabilities of such Subcontractor with respect to the providing of such service or services as if
provided by the Administrator. As of the date of this Administrative Services Agreement, the Administrator, Parent or its Affiliates
have, and the Company has consented to, agreements with the Subcontractors identified on Schedule 3.4 which are related to the
Business. The Administrator represents and warrants that Subcontractors providing Claims processing, data, network or other
information technology services through procured or managed third party relationships have the requisite authority under such
relationships to provide such services to Administrator or the Administrator has such authority in its own right with respect to such
relationships for the purposes of providing the Administrative Services to the Company, except where failure to be so authorized
would not reasonably be expected to have a material impact on Administrator’s ability to comply with the Service Standards and to
perform the Administrative Services.
(b) [In the event that Administrator proposes to subcontract any Management Functions, the subcontractor must be a
signatory to this Administrative Services Agreement and this Administrative Services Agreement must be modified in accordance
with section 18.1 herein to expressly provide for the subcontracting of such Management Functions to subcontractor. The
subcontractor will be subject to the provisions of 10 NYCRR Subpart 98-1 to the same extent as Administrator, including all
termination provisions, provided that the subcontractor may also be terminated by Administrator upon at least ninety (90) days notice
and with the prior written approval of the Commissioner of the New York State Department of Health.]
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This provision is found only in the Administrative Services Agreement of Health Net of New Jersey, Inc.
This provision is found only in the Administrative Services Agreement of Health Net of New York, Inc.
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