Health Net 2009 Annual Report Download - page 544

(e)(i) a reported income statement by line of business (e.g., commercial, Medicare and Medicaid), which would include
Premiums, other/investment income, medical expenses, Premium Taxes, Commissions and SG&A to identify pre-tax and net income
amounts; (ii) a restated partial income statement by line of business (e.g., commercial, Medicare and Medicaid), which would include
Premiums, medical expenses, Premium Taxes and Commissions to identify gross margin amounts; and (iii) a restated income
statement, which would include Premiums, other/investment income, medical expenses, Premium Taxes, Commissions and SG&A to
identify pre-tax and net income amounts; provided, however, in the case of the foregoing clauses (ii) and (iii), the Administrator shall
prepare and deliver to the Company a report no later than fifteen (15) Business Days after the last preceding calendar quarter; and
(f) an update to Schedule 1 reflecting all Administered Contracts in effect at the end of such month.
Section 10.4. Tax Reports.
(a) Within fifteen (15) Business Days after receipt by the Company of the Monthly Premium-By-State Report, the
Administrator shall prepare and submit to the Company a written statement of accounting in a form and containing such information
to be agreed upon by the Parties hereto (each, a “Monthly Premium Tax Accounting”, and together with the Health Assessments
Monthly Accountings, the “Monthly Accountings”) setting forth the estimated Premium Taxes arising from all collected Premiums
attributable to such month.
(b) The Administrator shall prepare all Premium Tax Returns of the Company. All such Premium Tax Returns shall be
prepared in a manner consistent with past practice, to the extent such past practice complies with applicable Law. As soon as possible,
but no later than ten (10) days prior to the due date (including extensions) for filing such Premium Tax Returns, the Administrator
shall deliver the Premium Tax Returns to the Company for its review, comment, and approval. The Administrator shall (i) make all
such changes as are reasonably requested by the Company at least five (5) days prior to the applicable due date, and (ii) file or cause
to be filed all such Premium Tax Returns on or prior to the due date (including extensions) for filing such Premium Tax Returns. The
Company shall timely pay all Taxes due as reflected on such Premium Tax Returns and Post-Effective Date Assessments.
Section 10.5. Customer Notifications. To the extent required by Law, the Administrator shall send to Contract Holders,
Customers, Participating Providers and/or Brokers/Consultants written notice in a form prepared by the Administrator and reasonably
approved by the Company to the effect that the Administrator has been appointed by the Company to provide the Administrative
Services with respect to the Administered Contracts. The Administrator may include such notice in a regularly scheduled annual
mailing to such Contract Holders, Customers, Participating Providers or Brokers/Consultants in lieu of a separate mailing.
Section 10.6. Change in Status. The Administrator shall notify the Company promptly (a) following public announcement of
entry into any agreement that would result in (i) a majority of the capital stock of Administrator no longer being owned or controlled,
directly or indirectly, by Parent (or its successor), or (ii) the sale or transfer of assets of the Administrator or any of its Affiliates that
would render the Administrator unable to perform its obligations under this Administrative Services Agreement, and (b) following the
adoption of any plan to liquidate, merge or dissolve the Administrator. Twenty (20) days prior to the closing of any sale, transfer or
merger contemplated by the preceding sentence, at Parent’s election, either (A) the successor or survivor of the transaction shall
reaffirm its obligations under this Agreement in writing to the Company or (B) Parent shall certify to the Company that it will fulfill,
or caused to be fulfilled, the obligations of the Administrator under this Agreement.
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