Williams v. Specialty Tank Services Ltd et alMotion to Dismiss for Failure to State a ClaimN.D. Tex.February 24, 2017UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF TEXAS ALLEN WILLIAMS, Plaintiff, v. : C.A. NO.: 3:17-CV-00491-D SPECIALTY TANK SERVICES, ltd. and : RELIANCE STANDARD LIFE INSURANCE COMPANY and Defendants. DEFENDANT RELIANCE STANDARD LIFE INSURANCE COMPANY'S MOTION TO DISMISS PURSUANT TO FED. R. CIV. P. 12(b)(6) COMES NOW, Defendant Reliance Standard Life Insurance Company ("Reliance Standard" or "Defendant") and files this motion to dismiss Plaintiff's claims and causes of action pursuant to Fed. R. Civ. P. 12(b)(6), and in support would show as follows: A. INTRODUCTION AND BACKGROUND Defendant Reliance Standard Life Insurance Company, by and through their attorneys, is asking the Court to dismiss the claims in Plaintiffs Original Petition for failure to state a claim upon which relief can be granted. Plaintiff is seeking long term disability benefits under a group policy issued by Reliance Standard to his former employer, Specialty Tank Services. The claim was denied because Reliance Standard concluded that Plaintiff did not meet the eligibility requirements in the policy. That decision was communicated to Plaintiff on January 10, 2017 and he filed his Petition ten days later. Plaintiff's Original Petition/Complaint must be dismissed for a number of reasons. As explained below, the long term disability plan is part of an employee welfare benefit plan sponsored by Plaintiff's former employer. As such, the claims in this case are governed by the 2385024v.1 Case 3:17-cv-00491-D Document 3 Filed 02/24/17 Page 1 of 9 PageID 37 Employee Retirement Income Security Act of 1974, 29 U.S.C. §§ 1001 - 1461 ("ERISA"). ERISA completely preempts state laws that relate to an employee benefit plan. Because Plaintiff's Petition only includes state law claims which are preempted, it must be dismissed. Plaintiff's Petition must be dismissed for an additional reason. A claimant seeking benefits under ERISA must exhaust his administrative remedies under the plan. Reliance's letter denying benefits informed Plaintiff of his appeal rights under ERISA. Instead of following them, Plaintiff first filed this lawsuit. Based on Fifth Circuit precedent, the Petition must be dismissed based on his failure to exhaust. Accordingly, the Motion to Dismiss should be granted.' B. LEGAL AUTHORITY 1. Motion to Dismiss Standard A motion to dismiss for failure to state a claim upon which relief can be granted under Rule 12(b)(6) of the Federal Rules of Civil Procedure tests the sufficiency of the statement of a claim for relief. Ramming v. United States, 281 F.3d 158, 161 (5th Cir. 2001), cert. denied, 536 U.S. 960 (2002). In ruling on such a motion, the Court must accept the factual allegations of the complaint as true, view them in a light most favorable to the plaintiff, and draw all reasonable inferences in favor of the plaintiff. See Scheuer v. Rhodes, 416 U.S. 232, 236 (1974), abrogated on other grounds by Harlow v. Fitzgerald, 457 U.S. 800 (1982); Leal v. McHugh, 731 F.3d 405, 410 (5th Cir. 2013); In re S. Scrap Material Co., LLC, 541 F.3d 584, 587 (5th Cir. 2008), cert. denied, 556 U.S. 1152 (2009); Ramming, 281 F.3d at 161. Nevertheless, "the plaintiffs complaint [must] be stated with enough clarity to enable a court or an opposing party to determine whether a claim is sufficiently alleged." Ramming, 281 F.3d at 161 (citing Elliott v. 1 In addition, Plaintiff is not entitled to a jury trial under ERISA. Borst v. Chevron Corp., 36 F.3d 1308, 1323-24 (5th Cir.1994); MB Valuation Servs., Inc. v. Ins. Co. of N. Am., No. CIV. A. 3:96-CV-0892P, 1997 WL 642987, at *4-6 (N.D.Tex. Oct. 6, 1997). 2385024v.1 Case 3:17-cv-00491-D Document 3 Filed 02/24/17 Page 2 of 9 PageID 38 Foufas, 867 F.2d 877, 880 (5th Cir. 1989)). Any "[f]actual allegations must be enough to raise a right to relief above the speculative level." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007); accord Cuvillier v. Taylor, 503 F.3d 397, 401 (5th Cir. 2007). Generally, the court may not look beyond the Complaint. See Indest v. Freeman Decorating, Inc., 164 F.3d 258, 261 (5th Cir. 1999); Baker v. Putnal, 75 F.3d 190, 196 (5th Cir. 1996). However, a court may consider "documents attached to the complaint, and any documents attached to the motion to dismiss that are central to the claim and referenced by the complaint." Lone Star Fund V (U.S.), L.P. v. Barclays Bank PLC, 594 F.3d 383, 387 (5th Cir. 2010). "Although a defendant bears the burden of pleading and proving affirmative defenses, where facts alleged in plaintiffs pleadings make it clear that the claim is barred, dismissal under Rule 12(b)(6) may be granted." In re Dynegy, Inc. Secs. Litig., 339 F. Supp. 2d 804, 819 (S.D. Tex. 2004); see also Jones v. Alcoa, Inc., 339 F.3d 359, 366 (5th Cir. 2003). 2. Plaintiff's Claims are Governed and Controlled by ERISA "Whether ERISA preemption applies regarding a particular insurance policy depends on whether the policy is properly classified as an employee welfare benefit plan under the terms of the statute." Meyers v. Tex. Health Res., 2009 WL 3756323, at *3 (N.D. Tex. Nov. 9, 2009); Magallon-Laffey v. Sun Life Assurance Co. of Canada, 2001 WL 1082414, at *2 (N.D. Tex. Aug. 28, 2001). Under ERISA, an "'employee welfare benefit plan' . . . mean[s] any plan, fund, or program . . . established or maintained by an employer or by an employee organization . . . for the purpose of providing for its participants or their beneficiaries, through the purchase of insurance or otherwise . . . benefits in the event of sickness, accident, disability [or] death." 29 U.S.C. § 1002(1). To qualify, a plan must (1) exist, (2) not fall within the safe harbor provisions established by the Department of Labor, and (3) satisfy the ERISA requirements of establishment 2385024v.1 Case 3:17-cv-00491-D Document 3 Filed 02/24/17 Page 3 of 9 PageID 39 and maintenance by an employer with intent to benefit employees. House v. American United Life Ins. Co, 499 F.3d 443, 448 (5th Cir. 2007) (citing Meredith v. Time Ins. Co., 980 F.2d 352, 355 (5th Cir. 1993)). To determine whether a plan exists, a court examines "whether from the surrounding circumstances a reasonable person could ascertain the intended benefits, beneficiaries, source of financing, and procedures for receiving benefits." Meredith, 980 F.2d at 355 (quoting Donovan v. Dillingham, 688 F.2d 1367, 1373 (11th Cir. 1982)). Each of these elements is included in the Reliance Standard policy under which Plaintiff is claiming benefits. See Reliance Standard long term disability policy, a copy of which is attached as Exhibit "A."2 The intended benefits are long term disability benefits as identified on the cover of the policy and throughout. Beneficiaries are identified in the Schedule of Benefits under Eligible Classes. See Exhibit "A" at page 1.0. The source of financing benefits is the Reliance Standard policy. The procedures for receiving benefits are spelled out in the Claims Provisions on page 6.0 of Exhibit "A." In order to fall within the confines of the safe-harbor provision, all of the following four criteria must be met: (1) the employer does not contribute to the plan; (2) participation is voluntary; (3) the employer's role is limited to collecting premiums and remitting them to the insurer; and (4) the employer receives no profit from the plan. Id.; see also, House, 499 F.3d at 449; Meredith, 980 F.2d at 355; McNeil, 205 F.3d at 190. When evaluating the safe harbor factors a claimant may not segregate the coverage in dispute from the rest of the employer's benefit plan. See Gross v. Sun Life Assurance Co. of Canada, 734 F.3d 1. 7 (1st Cir. 2013); Sgro v. Danone Waters of N Am., Inc., 532 F.3d 940, 943 (9th Cir. 2008) ("So long as [the employer] pays for some benefits, ERISA applies to the whole plan, even if employees pay entirely for 2 The named policyholder is Stronghold, Ltd. Plaintiff's employer, Specialty Tank Services, is identified as a covered subsidiary on page 1.0. 2385024v.1 Case 3:17-cv-00491-D Document 3 Filed 02/24/17 Page 4 of 9 PageID 40 other benefits"); Postma v. Paul Revere Life Ins. Co.,223 F.3d 533, 538 (7th Cir. 2000) ("For purposes of determining whether a benefit plan is subject to ERISA, its various aspects ought not be unbundled"); Gaylor v. John Hancock Mut. Life Ins. Co., 112 F.3d 460, 463 (10th Cir. 1997) (refusing to sever optional insurance coverage that "was a feature of the Plan, notwithstanding the fact that the cost of such coverage had to be contributed by the employee"); Glass v. United of Omaha Life Ins. Co., 33 F.3d 1341, 1345 (11th Cir. 1994). In addition to the long term disability policy, Reliance Standard insured the employer's Group Life plan. A copy of the Reliance Standard Group Life policy is attached as Exhibit "B." As stated on page 1.0 of Exhibit "B," participants were not required to contribute to the cost of coverage. Therefore, the first safe harbor element is not satisfied. On the same page it states that the policy covered 100% of eligible employees. Therefore, participation was not voluntary as required under the second part of the safe harbor test. Since all four parts must be satisfied to be exempt from ERISA, the safe harbor is inapplicable here. Finally, it cannot be disputed that the employer established and maintained the plan with the intent to provide an employee benefit. This is demonstrated by the fact that the employer is named as the policyholder. Because all of the requirements are satisfied, the plan under which Plaintiff is claiming benefits is governed by ERISA. 3. Plaintiff's State Law Claims are Preempted by ERISA ERISA pre-empts "any and all State laws insofar as they may now or hereafter relate to any employee benefit plan." 29 U. S. C. §1144(a). "Where a State's law acts immediately and exclusively upon ERISA plans . . . or where the existence of ERISA plans is essential to the law's operation . . . , that 'reference' will result in pre-emption." California Div. of Labor 2385024v.1 Case 3:17-cv-00491-D Document 3 Filed 02/24/17 Page 5 of 9 PageID 41 Standards Enforcement v. Dillingham Constr., N A., Inc., 519 U. S. 316, 326 (1997). According to the United States Supreme Court: The ERISA civil enforcement mechanism is one of those provisions with such "extraordinary pre-emptive power" that it "converts an ordinary state common law complaint into one stating a federal claim for purposes of the well-pleaded complaint rule." Aetna Health Inc. v. Davila, 542 U.S. 200, 209-210 (2004) (quoting Metropolitan Life Ins. Co. v. Taylor, 481 U.S. 58, 65-66 (1987)). The Fifth Circuit has adopted a two-pronged test to give meaning to the phrase "relates to." Bank of Louisiana v. Aetna U.S. Healthcare Inc., 468 F.3d 237, 242 (5th Cir. 2006). To show that a law "relates to" employee benefit plans, the party claiming preemption must show that: (1) the claim "addresses an area of exclusive federal concern, such as the right to receive benefits under the terms of the plan; and (2) the claim directly affects the relationship among traditional ERISA entities - the employer, the plan and its fiduciaries, and the participants and beneficiaries." Bank of Louisiana, 468 F.3d at 242. Pursuant to 29 U.S.C. § 1132(a)(1)(B), a claimant may file a lawsuit under ERISA "to recover benefits due to [her] under the terms of [her] plan, to enforce [her] rights under the terms of the plan, or to clarify [her] rights to future benefits under the terms of the plan." Therefore, Plaintiff's claims against Reliance Standard directly relate to an area exclusively reserved for ERISA. As such, each of Plaintiff's state law claims is preempted and must be dismissed. Mayeaux v. La. Health Serv. & Indem. Co., 376 F.3d 420 (5th Cir. 2004) (state law negligence, unfair trade practices and other state law claims preempted by ERISA); Ellis v. Libery Life Assur. Co., 394 F.3d 262 (5th Cir. 2004) (state law claims challenging the denial of benefits under Texas Insurance Code and common law duty preempted by ERISA). There is no way to 2385024v.1 Case 3:17-cv-00491-D Document 3 Filed 02/24/17 Page 6 of 9 PageID 42 distinguish the state law claims in this case. Therefore, they are preempted and must be dismissed.3 4. Plaintiff's Petition Must be Dismissed Based on His Failure to Exhaust. The Fifth Circuit "requires that claimants seeking benefits from an ERISA plan must first exhaust available administrative remedies under the plan before bringing suit to recover benefits." Bourgeois v. Employees of Santa Fe Intl Corps., 215 F.3d 475, 479 (5th Cir. 2000). The purposes behind the exhaustion requirement include (1) upholding Congress' desire that ERISA fiduciaries should be responsible for deciding claims; (2) providing a sufficiently clear record of administrative action if litigation should ensue; (3) ensuring that any judicial review of fiduciary action is made under the arbitrary and capricious standard, not de novo; (4) minimizing the number of frivolous ERISA lawsuits; and (5) promoting the consistent treatment of benefit claims. Bourgeois, 215 F.3d at 479, n.2; Hall v. Nat'l Gympsum Co., 105 F.3d 225, 231 (5th Cir. 1994); Denton v. First Nat'l Bank of Waco, Tex., 765 F.2d 1295, 1300 (5th Cir. 1985). Strict compliance with a plan's claim procedures, including exhausting all internal appeals, is required, as "allowing informal attempts to substitute for the formal claims procedure would frustrate the primary purposes of the exhaustion requirement." Bourgeois, 215 F.3d at 480 n.14; Denton, 765 F.2d at 1300-01. Exhaustion of remedies is "uniformly imposed" by courts. Hall, 105 F.3d at 231. Once a defendant has shown that the plaintiff failed to exhaust his administrative remedies, dismissal is required. Swanson v. Hearst Corp. Long Term Disability Plan, 586 F.3d 1016, 1017, 1019 (5th Cir. 2009). 3 In addition, the relief sought by Plaintiff, exemplary damages, mental anguish damages, etc. is also preempted by ERISA and must be dismissed. See, Rogers v. Hartford Life & Accident Ins. Co., 167 F.3d 933, 944 (5th Cir. 1999). 2385024v.1 Case 3:17-cv-00491-D Document 3 Filed 02/24/17 Page 7 of 9 PageID 43 On January 10, 2017, Reliance Standard wrote to Plaintiff to notify him that the claim for benefits was denied. See letter, a copy of which is attached as Exhibit "C." The letter also identified Plaintiff's appeal rights under ERISA: You may request a review of this determination by submitting your request in writing to: Reliance Standard Life Insurance Company Quality Review Unit P.O. Box 8330 Philadelphia, PA 19101-8330 This written request for review must be submitted within 180 days of your receipt of this letter. Your request should state any reasons why you feel this determination is incorrect, and should include any written comments, documents, records, or other information relating to your claim for benefits, including but not limited to any information submitted in conjunction with any claim for Social Security disability or other benefits which you would like us to consider. Only one review will be allowed, and your request must be submitted within 180 days of your receipt of this letter to be considered. See Exhibit "C." The letter also warned Plaintiff about the consequences of his failure to exhaust. It explained: Your failure to request a review within 180 days of your receipt of this letter may constitute a failure to exhaust the administrative remedies available under the Act, and effect your ability to bring civil action under the Act. See Exhibit "C." Plaintiff does not allege that he exhausted his administrative remedies before filing suit and it is obvious that he did not. The Petition was filed just ten days after the claim decision. Because Plaintiff failed to exhaust his administrative remedies, the lawsuit must be dismissed. To the extent Plaintiff re-files his lawsuit after exhausting his remedies under the plan, the Complaint may only include a claim for benefits under ERISA. 2385024v.1 Case 3:17-cv-00491-D Document 3 Filed 02/24/17 Page 8 of 9 PageID 44 Via E-File C. CONCLUSION For the reasons stated above, Plaintiff's Petition against Reliance Standard Life Insurance Company should be dismissed. Respectfully submitted, WILSON, ELSER, MOSKOWITZ, EDELMAN D KE P By: C `'errs Texas Bar No. 405 159 Federal I.D. No. 522 909 Fannin Street, Suite 3300 Houston, TX 77010 Telephone: (713) 353-2000 Facsimile: (713)785-7780 claire.parsons@wilsonelser.com and Allison Maynard Texas Bar No. 24055923 901 Main Street, Suite 4800 Dallas, Texas 75270 Telephone: (214) 698-8000 Facsimile: (214) 698-1101 Allison.Maynard@wilsonelser.com Attorneys for Defendant Reliance Standard Life Insurance Company CERTIFICATE OF SERVICE The undersigned counsel hereby certifies that the foregoing instrument was served on all parties in accordance with the Federal Rules of Civil Procedure on this 24th day of February, 2017: Mark S. Humphreys Mark S. Humphreys, P.C. 702 Dalworth Street Grand Prairie, TX 75050 2385024v.1 Case 3:17-cv-00491-D Document 3 Filed 02/24/17 Page 9 of 9 PageID 45 RELIANCE STANDARD LIFE INSURANCE COMPANY 2001 Market Street, Suite 1500, Philadelphia, PA 19103-7090 IMPORTANT NOTICE To obtain information or to make a complaint: You may call Reliance Standard Life Insurance Company's toll-free telephone number for information or to make a complaint at 1-800-351-7500 You may contact the Texas Department of Insurance to obtain information on companies, coverages, rights or complaints at 1-800-252-3439 You may write the Texas Department of Insurance P.O. Box 149104 Austin, Texas 78714-9104 FAX # (512) 475-1771 Web: http://www.tdi.state.tx.us E-mail: ConsumerProtection@tdi.state.tx.us PREMIUM OR CLAIM DISPUTES: Should you have a dispute concerning your premium or about a claim, you should contact the company first. If the dispute is not resolved, you may contact the Texas Department of Insurance. ATTACH THIS NOTICE TO YOUR POLICY: This notice is for information only and does not become a part or condition of the attached document. AVISO IMPORTANTE Para obtener informacion o para someter una queja: Usted puede Ilamar al numero de telefono gratis de Reliance Standard Life Insurance Company para informacion o para someter una queja al 1-800-351-7500 Puede comunicarse con el Departamento de Seguros de Texas para obtener informacion acerca de companias, coberturas, derechos o quejas al 1-800-252-3439 Puede escribir al Departamento de Seguros de Texas P.O. Box 149104 Austin, Texas 78714-9104 FAX # (512) 475-1771 Web: http://www.tdi.state.tx.us E-mail: ConsumerProtection@tdi.state.tx.us DISPUTAS SOBRE PRIMAS 0 RECLAMOS: Si tiene una disputa concerniente a su prima o a un reclamo, debe comunicarse con la compania primero. Si no se resuelve la disputa, puede entonces comunicarse con el departamento (TDI). UNA ESTE AVISO A SU POLIZA: Este aviso es solo para proposito de informacion y no se convierte en parte o condicion del documento adjunto. LRS 8690-0492 EXHIBIT A Case 3:17-cv-00491-D Document 3-1 Filed 02/24/17 Page 1 of 34 PageID 46 RELIANCE STANDARD !LIFE INSURANCE COMPANY Home Office: Schaumburg, Illinois • Administrative Office: Philadelphia, Pennsylvania POLICYHOLDER: Stronghold, Ltd. POLICY NUMBER: LTD 123598 EFFECTIVE DATE: January 1, 2013, as amended through January 1, 2016 ANNIVERSARY DATES: October 1, 2014 and each October 1st thereafter. PREMIUM DUE DATES: The first Premium is due on the Effective Date. Further Premiums are due monthly, in advance, on the first day of each month. This Policy is delivered in Texas and is governed by its laws and/or the Employee Retirement Income Security Act of 1974 ("ERISA") as amended, where applicable. Reliance Standard Life Insurance Company is referred to as "we", "our" or "us" in this Policy. The Policyholder and any subsidiaries, divisions or affiliates are referred to as "you", "your" or "yours" in this Policy. We agree to provide insurance to you in exchange for the payment of Premium and a signed Application. This Policy provides income replacement benefits for Total Disability from Sickness or Injury. It insures those Eligible Persons for the Monthly Benefit shown on the Schedule of Benefits. The insurance is subject to the terms and conditions of this Policy. The Effective Date of this Policy is shown above. This Policy stays in effect as long as Premium is paid when due. The "TERMINATION OF THIS POLICY" section of the GENERAL PROVISIONS explains when the insurance terminates. This Policy is signed by our President and Secretary. GQ0AL Pt6tIlL Secretary President GROUP LONG TERM DISABILITY INSURANCE NON-PARTICIPATING THIS IS NOT A POLICY OF WORKERS' COMPENSATION INSURANCE. THE EMPLOYER DOES NOT BECOME A SUBSCRIBER TO THE WORKERS' COMPENSATION SYSTEM BY PURCHASING THIS POLICY, AND IF THE EMPLOYER IS A NON-SUBSCRIBER, THE EMPLOYER LOSES THOSE BENEFITS WHICH WOULD OTHERWISE ACCRUE UNDER THE WORKERS' COMPENSATION LAWS. THE EMPLOYER MUST COMPLY WITH THE WORKERS' COMPENSATION LAW AS IT PERTAINS TO NON-SUBSCRIBERS AND THE REQUIRED NOTIFICATIONS THAT MUST BE FILED AND POSTED. This Long Term Disability Policy amends the Long Term Disability Policy previously issued to you by us. It is issued on May 10, 2016. LRS-6564 Ed. 4/06 Case 3:17-cv-00491-D Document 3-1 Filed 02/24/17 Page 2 of 34 PageID 47 RELIANCE STANDARD LIFE INSURANCE COMPANY Home Office: Schaumburg, Illinois Administrative Office: Philadelphia, Pennsylvania GROUP POLICY NUMBER: LTD 123598 POLICY EFFECTIVE DATE: January 1, 2013, as amended through January 1, 2016 POLICY DELIVERED IN: Texas ANNIVERSARY DATE: October 1st in each year Application is made to us by: Stronghold, Ltd. This Application is completed in duplicate, one copy to be attached to your Policy and the other returned to us. It is agreed that this Application takes the place of any previous application for your Policy. Signed at this day of Policyholder: By: (Signature) (Title) Please sign and return. *BOD* LRS-6564-1 Ed. 2/83 Case 3:17-cv-00491-D Document 3-1 Filed 02/24/17 Page 3 of 34 PageID 48 *BC1COAPLTD 12359801/01/2016* *BC1COAPLTD 12359801/01/2016*RSL *BC2COAPStronghold, Ltd. Case 3:17-cv-00491-D Document 3-1 Filed 02/24/17 Page 4 of 34 PageID 49 RELIANCE STANDARD LIFE INSURANCE COMPANY Home Office: Schaumburg, Illinois Administrative Office: Philadelphia, Pennsylvania GROUP POLICY NUMBER: LTD 123598 POLICY EFFECTIVE DATE: January 1, 2013, as amended through January 1, 2016 POLICY DELIVERED IN: Texas ANNIVERSARY DATE: October 1st in each year Application is made to us by: Stronghold, Ltd. This Application is completed in duplicate, one copy to be attached to your Policy and the other returned to us. It is agreed that this Application takes the place of any previous application for your Policy. Signed at this day of Policyholder: By - (Signature) (Title) LRS-6564-1 Ed. 2/83 Case 3:17-cv-00491-D Document 3-1 Filed 02/24/17 Page 5 of 34 PageID 50 TABLE OF CONTENTS Page SCHEDULE OF BENEFITS 1.0 DEFINITIONS 2.0 CERTAIN RESPONSIBILITIES OF THE POLICYHOLDER 3.0 TRANSFER OF INSURANCE COVERAGE 4.0 GENERAL PROVISIONS 5.0 Entire Contract Changes Time Limit on Certain Defenses Records Maintained Clerical Error Misstatement of Age Not in Lieu of Workers' Compensation Conformity with State Laws Certificate of Insurance Termination of this Policy CLAIMS PROVISIONS 6.0 Notice of Claim Claim Forms Written Proof of Total Disability Payment of Claims Arbitration of Claims Physical Examination and Autopsy Legal Actions INDIVIDUAL ELIGIBILITY, EFFECTIVE DATE AND TERMINATION 7.0 General Group Eligibility Requirements Effective Date of Individual Insurance Termination of Individual Insurance Individual Reinstatement PREMIUMS 8.0 BENEFIT PROVISIONS 9.0 WORKSITE MODIFICATION PROVISION 10.0 EXCLUSIONS 11.0 LIMITATIONS , 12.0 LIMITATIONS - OTHER LIMITED BENEFITS 13.0 SPECIFIC INDEMNITY BENEFIT 14.0 SURVIVOR BENEFIT - LUMP SUM 15.0 WORK INCENTIVE AND CHILD CARE BENEFITS 16.0 EXTENSION OF COVERAGE UNDER THE FAMILY AND MEDICAL LEAVE ACT AND UNIFORMED SERVICES EMPLOYMENT AND REEMPLOYMENT RIGHTS ACT (USERRA) . 17.0 EXTENDED DISABILITY BENEFIT 18.0 LRS-6564-2 Ed. 2/83 Case 3:17-cv-00491-D Document 3-1 Filed 02/24/17 Page 6 of 34 PageID 51 REHABILITATION BENEFIT 19.0 LRS-6564-2 Ed. 2/83 Case 3:17-cv-00491-D Document 3-1 Filed 02/24/17 Page 7 of 34 PageID 52 SCHEDULE OF BENEFITS NAME OF SUBSIDIARIES, DIVISIONS OR AFFILIATES TO BE COVERED: Cat Spec, Ltd., Specialty Tank Services, Ltd., Stronghold Inspection, Ltd., Turnkey Automation, Ltd., Premiere MI, Ltd., Elite Piping & Civil, Ltd., Elite Fabrication, Ltd., Elite Turnaround Specialist, Ltd., Stronghold Specialty, Ltd. "Affiliate" means any corporation, partnership, or sole proprietor under the common control of the Policyholder. ELIGIBLE CLASSES: Each active, Full-time Employee, except any person employed on a temporary or seasonal basis. INDIVIDUAL EFFECTIVE DATE: The first of the month coinciding with or next following the day the person becomes eligible. INDIVIDUAL REINSTATEMENT: Not Applicable MINIMUM PARTICIPATION REQUIREMENTS: Percentage: 60% Number of Insureds: 10 LONG TERM DISABILITY BENEFIT ELIMINATION PERIOD: 90 consecutive days of Total Disability. MONTHLY BENEFIT: The Monthly Benefit is an amount equal to 60% of Covered Monthly Earnings, payable in accordance with the section entitled Benefit Amount. MINIMUM MONTHLY BENEFIT: In no event will the Monthly Benefit payable to an Insured be less than $100. MAXIMUM MONTHLY BENEFIT: $10,000 (this is equal to a maximum Covered Monthly Earnings of $16,667). MAXIMUM DURATION OF BENEFITS: Benefits will not accrue beyond the longer of: the Duration of Benefits; or Normal Retirement Age; specified below: Age at Disablement Duration of Benefits (in years) 61 or less To Age 65 62 3%2 63 3 64 2 1/2 65 2 66 1 % 67 1 1/2 68 1 IA 69 or more 1 OR LRS-6564-3-0690 Page 1.0 Case 3:17-cv-00491-D Document 3-1 Filed 02/24/17 Page 8 of 34 PageID 53 Normal Retirement Age as defined by the 1983 Amendments to the United States Social Security Act and determined by the Insured's year of birth, as follows: Year of Birth Normal Retirement Age 1937 or before 1938 1939 1940 1941 1942 1943 thru 1954 1955 1956 1957 1958 1959 1960 and after 65 years 65 years and 2 months 65 years and 4 months 65 years and 6 months 65 years and 8 months 65 years and 10 months 66 years 66 years and 2 months 66 years and 4 months 66 years and 6 months 66 years and 8 months 66 years and 10 months 67 years CHANGES IN MONTHLY BENEFIT: Increases in the Monthly Benefit are effective on the date of the change, provided the Insured is Actively at Work on the effective date of the change. If the Insured is not Actively at Work on that date, the effective date of the increase in the benefit amount will be deferred until the date the Insured returns to Active Work. Decreases in the Monthly Benefit are effective on the date the change occurs. However, changes in the Monthly Benefit because of a change in Earnings are effective as explained in the definition of Covered Monthly Earnings. Premium changes due to an Insured's age will occur on the Policy Anniversary Date coinciding with or next following the birthday that causes the Insured to enter the next age bracket. If an increase in, or initial application for, the Monthly Benefit is due to a life event change (such as marriage, birth or specific changes in employment status), proof of health will not be required for amounts up to the guaranteed issue amount, provided the Eligible Person applies within thirty-one (3'1) days of such life event. CONTRIBUTIONS: Insured: 100% Contributions for the Insured are being made on a post-tax basis. For purposes of filing the Insured's Federal Income Tax Return, this means that under the law as of the date this Policy was issued, the Insured's Monthly Benefit might be treated as non-taxable. It is recommended that the Insured contact his/her personal tax advisor. LRS-6564-3-0690 Page 1.1 Case 3:17-cv-00491-D Document 3-1 Filed 02/24/17 Page 9 of 34 PageID 54 DEFINITIONS "Actively at Work" and "Active Work" mean actually performing on a Full-time basis the material duties pertaining to his/her job in the place where and the manner in which the job is normally performed. This includes approved time off such as vacation, jury duty and funeral leave, but does not include time off as a result of an Injury or Sickness. "Any Occupation" means an occupation normally performed in the national economy for which an Insured is reasonably suited based upon his/her education, training or experience. "Claimant" means an Insured who makes a claim for benefits under this Policy for a loss covered by this Policy as a result of an Injury to or a Sickness of the Insured. Applicable to a Partner: "Covered Monthly Earnings" means the Insured's average monthly compensation including 401(k), 403(b) and Section 125 deferrals; commissions, overtime pay and bonuses from the partnership during the calendar year prior to the date Total Disability began, as reported on the partnership federal income tax return as "self- employment earnings (loss)" per Schedule K1, Federal Form 1065 (box 14). If the Insured was not a partner during the calendar year prior to the date Total Disability began, "Covered Monthly Earnings" means the Insured's average monthly compensation including 401(k), 403(b) and Section 125 deferrals; commissions, overtime pay and bonuses (excluding dividends, capital gains and return of capital) from the partnership prior to the date Total Disability began, determined in accordance with the terms of the Insured's partnership agreement. Applicable to all other employees: "Covered Monthly Earnings" means 1/12 of the amount of wages you paid to the Insured as reported on his/her W-2 form for the year just before the date Total Disability began. W-2 earnings includes base pay, 401(k), 403(b) and Section 125 deferrals; commissions, overtime pay and bonuses received from you, but excludes group term life imputed income; allowances, such as, but not limited to, disturbance allowances, relocation allowances, leased car and car allowances; and other special forms of compensation. If the W-2 is for less than a full calendar year, W-2 earnings, as defined above, will be annualized and divided by 12. However, if the Insured was not employed by you in the calendar year just before the date Total Disability began, "Covered Monthly Earnings" means the Insured's basic monthly salary including 401(k), 403(b) and Section 125 deferrals; commissions, overtime pay and bonuses received from you on the day just before the date Total Disability began. "Eligible Person" means a person who meets the Eligibility Requirements of this Policy. "Elimination Period" means a period of consecutive days of Total Disability, as shown on the Schedule of Benefits page, for which no benefit is payable. It begins on the first day of Total Disability. Interruption Period: If, during the Elimination Period, an Insured returns to Active Work for less than 30 days, then the same or related Total Disability will be treated as continuous. Days that the Insured is Actively at Work during this interruption period will not count towards the Elimination Period. This interruption of the Elimination Period will not apply to an Insured who becomes eligible under any other group long term disability insurance plan. "Full-time" means working for you for a minimum of 30 hours during a person's regular work week. "Hospital" or "Institution" means a facility licensed to provide care and Treatment for the condition causing the Insured's Total Disability. "Injury" means bodily Injury resulting directly from an accident, independent of all other causes. The Injury must cause Total Disability which begins while insurance coverage is in effect for the Insured. "Insured" means a person who meets the Eligibility Requirements of this Policy and is enrolled for this insurance. "Physician" means a duly licensed practitioner who is recognized by the law of the state in which treatment is received as qualified to treat the type of Injury or Sickness for which claim is made. The Physician may not be the Insured or a member of his/her immediate family. "Premium" means the amount of money needed to keep this Policy in force. LRS-6564-4-0406 Page 2.0 Case 3:17-cv-00491-D Document 3-1 Filed 02/24/17 Page 10 of 34 PageID 55 "Regular Care" means Treatment that is administered as frequently as is medically required according to guidelines established by nationally recognized authorities, medical research, healthcare organizations, governmental agencies or rehabilitative organizations. Care must be rendered personally by the Insured's Physician according to generally accepted medical standards in the Insured's locality, be of a demonstrable medical value and be necessary to meet his/her basic health needs. "Regular Occupation" means the occupation the Insured is routinely performing when Total Disability begins. We will look at the Insured's occupation as it is normally performed in the national economy, and not the unique duties performed for a specific employer or in a specific locale. "Retirement Benefits" mean money which the Insured is entitled to receive upon early or normal retirement or disability retirement under: (1) any plan of a state, county or municipal retirement system, if such pension benefits include any credit for employment with you; (2) Retirement Benefits under the United States Social Security Act of 1935, as amended or under any similar plan or act; or (3) an employer's retirement plan where payments are made in a lump sum or periodically and do not represent contributions made by an Insured. Retirement Benefits do not include: (1) a federal government employee pension benefit; (2) a thrift plan; (3) a deferred compensation plan; (4) an individual retirement account (IRA); (5) a tax sheltered annuity (TSA); (6) a stock ownership plan; or (7) a profit sharing plan; or (8) section 401(k), 403(b) or 457 plans. "Sickness" means illness or disease causing Total Disability which begins while insurance coverage is in effect for the Insured. Sickness includes pregnancy, childbirth, miscarriage or abortion, or any complications therefrom. "Totally Disabled" and "Total Disability" mean, that as a result of an Injury or Sickness, during the Elimination Period and thereafter an Insured cannot perform the material duties of his/her Regular Occupation; (1) "Partially Disabled" and "Partial Disability" mean that as a result of an Injury or Sickness an Insured is capable of performing the material duties of his/her Regular Occupation on a part-time basis or some of the material duties on a full-time basis. An Insured who is Partially Disabled will be considered Totally Disabled, except during the Elimination Period; and (2) "Residual Disability" means being Partially Disabled during the Elimination Period. Residual Disability will be considered Total Disability. If an Insured is employed by you and requires a license for such occupation, the loss of such license for any reason does not in and of itself constitute "Total Disability". "Treatment" means care consistent with the diagnosis of the Insured's Injury or Sickness that has its purpose of maximizing the Insured's medical improvement. It must be provided by a Physician whose specialty or experience is most appropriate for the Injury or Sickness and conforms with generally accepted medical standards to effectively manage and treat the Insured's Injury or Sickness. LRS-6564-4-0406 Page 2.1 Case 3:17-cv-00491-D Document 3-1 Filed 02/24/17 Page 11 of 34 PageID 56 CERTAIN RESPONSIBILITIES OF THE POLICYHOLDER For the purposes of this Policy, you act on your behalf or as the employee's agent. Under no circumstances will you be deemed our agent. Annual Enrollment Periods It is your responsibility to provide us with written notice and obtain our written approval at least 31 days prior to conducting an annual enrollment period. Compliance With Americans With Disabilities Act (ADA) It is your responsibility to establish and maintain procedures which comply with the employer responsibilities of the Americans With Disabilities Act of 1990, as amended. Compliance With The Employee Retirement Income Security Act (ERISA) It is your responsibility to establish and maintain procedures which comply with the employer and/or Plan Administrator responsibilities of ERISA and the accompanying regulations, where applicable. Distribution Of Certificates Of Insurance A Certificate of Insurance will be provided to you for each Insured covered under this Policy. The Certificate will outline the insurance coverage, and explain the provisions, benefits and limitations of this Policy. It is your responsibility to distribute the appropriate Certificates and any updates or other notices from us to each Insured. Maintenance Of Records It is your responsibility to maintain sufficient records of each Insured's insurance, including additions, terminations and changes. We reserve the right to examine these records at the place where they are kept during normal business hours or at a place mutually agreeable to you and us. Such records must be maintained by you for at least 3 years after this Policy terminates. Reporting Of Eligibility And Coverage Amounts It is your responsibility to notify us on a timely basis of all individuals eligible for coverage under this Policy, of all individuals whose eligibility for coverage ends and of all changes in individual coverage amounts. It is your responsibility to provide accurate census and salary information on all Insureds on or before each Anniversary Date, if we request such information. Timely Payment Of Premiums It is your responsibility to pay all premiums required under this Policy when due. Any change in the premium contribution basis must be approved by us. LRS-6564-114-0406 Page 3.0 Case 3:17-cv-00491-D Document 3-1 Filed 02/24/17 Page 12 of 34 PageID 57 TRANSFER OF INSURANCE COVERAGE If an employee was covered under any group long term disability insurance plan maintained by you prior to this Policy's Effective Date, that employee will be insured under this Policy, provided that he/she is Actively At Work and meets all of the requirements for being an Eligible Person under this Policy on its Effective Date. If an employee was covered under the prior group long term disability insurance plan maintained by you prior to this Policy's Effective Date, but was not Actively at Work due to Injury or Sickness on the Effective Date of this Policy and would otherwise qualify as an Eligible Person, coverage will be allowed under the following conditions: (1) The employee must have been insured with the prior carrier on the date of the transfer; and (2) Premiums must be paid; and (3) Total Disability must begin on or after this Policy's Effective Date. If an employee is receiving long term disability benefits, becomes eligible for coverage under another group long term disability insurance plan, or has a period of recurrent disability under the prior group long term disability insurance plan, that employee will not be covered under this Policy. If premiums have been paid on the employee's behalf under this Policy, those premiums will be refunded. Pre-existing Conditions Limitation Credit If an employee is an Eligible Person on the Effective Date of this Policy, any time used to satisfy the Pre-existing Conditions Limitation of the prior group long term disability insurance plan will be credited towards the satisfaction of the Pre-existing Conditions Limitation of this Policy. LRS-6564-116-0800 Page 4.0 Case 3:17-cv-00491-D Document 3-1 Filed 02/24/17 Page 13 of 34 PageID 58 GENERAL PROVISIONS ENTIRE CONTRACT: The entire contract between you and us is this Policy, your Application (a copy of which is attached at issue) and any attached amendments. CHANGES: No agent has authority to change or waive any part of this Policy. To be valid, any change or waiver must be in writing, signed by either our President, a Vice President, or a Secretary. The change or waiver must also be attached to this Policy. TIME LIMIT ON CERTAIN DEFENSES: After this Policy has been in force for two (2) years from its Effective Date, no statement made by you shall be used to void this Policy; and no statement by any Insured on a written application for insurance shall be used to reduce or deny a claim after the Insured's insurance coverage, with respect to which claim has been made, has been in effect for two (2) years. RECORDS MAINTAINED: You must maintain records of all Insureds. Such records must show the essential data of the insurance, including new persons, terminations, changes, etc. This information must be reported to us regularly. We reserve the right to examine the insurance records maintained at the place where they are kept. This review will only take place during normal business hours. CLERICAL ERROR: Clerical errors in connection with this Policy or delays in keeping records for this Policy, whether by you, us, or the Plan Administrator: (1) will not terminate insurance that would otherwise have been effective; and (2) will not continue insurance that would otherwise have ceased or should not have been in effect. If appropriate, a fair adjustment of premium will be made to correct a clerical error. MISSTATEMENT OF AGE: If an Insured's age is misstated, the Premium will be adjusted. If the Insured's benefit is affected by the misstated age, it will also be adjusted. The benefit will be changed to the amount the Insured is entitled to at his/her correct age. NOT IN LIEU OF WORKERS' COMPENSATION: This Policy is not a Workers' Compensation Policy. It does not provide Workers' Compensation benefits. CONFORMITY WITH STATE LAWS: Any section of this Policy, which on its Effective Date, conflicts with the laws of the state in which this Policy is issued, is amended by this provision. This Policy is amended to meet the minimum requirements of those laws. CERTIFICATE OF INSURANCE: We will send to you an individual certificate for each Insured. The certificate will outline the insurance coverage, state this Policy's provisions that affect the Insured, and explain to whom benefits are payable. TERMINATION OF THIS POLICY: You may cancel this Policy at any time by giving us written notice. This Policy will be cancelled on the date we receive your notice or, if later, the date requested in your notice. This Policy will terminate at the end of the Grace Period if Premium has not been paid by that date. We may cancel this Policy within thirty-one (31) days of written notice prior to the date of cancellation, only: (1) if the number of Insureds is less than the Minimum Participation Number shown on the Schedule of Benefits; or (2) if the percentage of Eligible Persons insured is less than the Minimum Participation Percentage shown on the Schedule of Benefits. You will still owe us any Premium that is not paid up to the date this Policy is cancelled. We will return, pro-rata, any part of the Premium paid beyond the date this Policy is cancelled. Termination of this Policy will not affect any claim which was covered prior to termination, subject to the terms and conditions of this Policy. LRS-6564-5-0394 Page 5.0 Case 3:17-cv-00491-D Document 3-1 Filed 02/24/17 Page 14 of 34 PageID 59 CLAIMS PROVISIONS NOTICE OF CLAIM: Written notice must be given to us within thirty-one (31) days after a Total Disability covered by this Policy occurs, or as soon as reasonably possible. The notice should be sent to us at our Administrative Office or to our authorized agent. The notice should include your name, the Policy Number and the Insured's name. CLAIM FORMS: When we receive the notice of claim, we will send the Claimant the claim forms to file with us. We will send them within fifteen (15) days after we receive notice. If we do not, then proof of Total Disability will be met by giving us a written statement of the type and extent of the Total Disability. The statement must be sent within ninety (90) days after the loss began. WRITTEN PROOF OF TOTAL DISABILITY: For any Total Disability covered by this Policy, written proof must be sent to us within ninety (90) days after the Total Disability occurs. If written proof is not given in that time, the claim will not be invalidated nor reduced if it is shown that written proof was given as soon as was reasonably possible. In any event, proof must be given within one (1) year after the Total Disability occurs, unless the Claimant is legally incapable of doing so. PAYMENT OF CLAIMS: When we receive written proof of Total Disability covered by this Policy, we will pay any benefits due. Benefits that provide for periodic payment will be paid for each period as we become liable. We will pay benefits to the Insured, if living, or else to his/her estate. If the Insured has died and we have not paid all benefits due, we may pay up to $1,000 to any relative by blood or marriage, or to the executor or administrator of the Insured's estate. The payment will only be made to persons entitled to it. An expense incurred as a result of the Insured's last illness, death or burial will entitle a person to this payment. The payments will cease when a valid claim is made for the benefit. We will not be liable for any payment we have made in good faith. ARBITRATION OF CLAIMS: Any claim or dispute arising from or relating to our determination regarding the Insured's Total Disability may be settled by arbitration when agreed to by the Insured and us in accordance with the Rules for Health and Accident Claims of the American Arbitration Association or by any other method agreeable to the Insured and us. In the case of a claim under an Employee Retirement Income Security Act (hereinafter referred to as ERISA) Plan, the Insured's ERISA claim appeal remedies, if applicable, must be exhausted before the claim may be submitted to arbitration. Judgment upon the award rendered by the arbitrators may be entered in any court having jurisdiction over such awards. Unless otherwise agreed to by the Insured and us, any such award will be binding on the Insured and us for a period of twelve (12) months after it is rendered assuming that the award is not based on fraudulent information and the Insured continues to be Totally Disabled. At the end of such twelve (12) month period, the issue of Total Disability may again be submitted to arbitration in accordance with this provision. Any costs of said arbitration proceedings levied by the American Arbitration Association or the organization or person(s) conducting the proceedings will be paid by us. PHYSICAL EXAMINATION AND AUTOPSY: We will, at our expense, have the right to have a Claimant interviewed and/or examined: (1) physically; (2) psychologically; and/or (3) psychiatrically; to determine the existence of any Total Disability which is the basis for a claim. This right may be used as often as it is reasonably required while a claim is pending. We can have an autopsy made unless prohibited by law. LEGAL ACTIONS: No legal action may be brought against us to recover on this Policy within sixty (60) days after written proof of loss has been given as required by this Policy. No action may be brought after three (3) years (Kansas, five (5) years; South Carolina, six (6) years) from the time written proof of loss is received. LRS-6564-6-0394 Page 6.0 Case 3:17-cv-00491-D Document 3-1 Filed 02/24/17 Page 15 of 34 PageID 60 INDIVIDUAL ELIGIBILITY, EFFECTIVE DATE AND TERMINATION GENERAL GROUP: The general group will be your employees and employees of any subsidiaries, divisions or affiliates named on the Schedule of Benefits page. ELIGIBILITY REQUIREMENTS: A person is eligible for insurance under this Policy if he/she is a member of an Eligible Class, as shown on the Schedule of Benefits page. EFFECTIVE DATE OF INDIVIDUAL INSURANCE: If you pay the entire Premium due for an Eligible Person, the insurance for such Eligible Person will go into effect on the Individual Effective Date, as shown on the Schedule of Benefits page. If an Eligible Person pays a part of the Premium, he/she must apply in writing for the insurance to go into effect. He/she will become insured on the latest of: (1) the Individual Effective Date as shown on the Schedule of Benefits page, if he/she applies on or before that date; (2) on the first of the month coinciding with or next following the date he/she applies, if he/she applies within thirty- one (31) days from the date he/she first met the Eligibility Requirements; or (3) on the first of the month coinciding with or next following the date we approve any required proof of health acceptable to us. We require this proof if a person applies: (a) after thirty-one (31) days from the date he/she first met the Eligibility Requirements; or (b) after he/she terminated this insurance but remained in an Eligible Class as shown on the Schedule of Benefits page; or (c) after being eligible for coverage under a prior plan for more than thirty-one (31) days but did not elect to be covered under that prior plan. The insurance for an Eligible Person will not go into effect on a date he/she is not Actively at Work because of a Sickness or Injury. The insurance will go into effect after the person is Actively at Work for one (1) full day in an Eligible Class, as shown on the Schedule of Benefits page. TERMINATION OF INDIVIDUAL INSURANCE: The insurance of an Insured will terminate on the first of the following to occur: (1) the date this Policy terminates; (2) the date the Insured ceases to meet the Eligibility Requirements; (3) the end of the period for which Premium has been paid for the Insured; or (4) the date the Insured enters military service (not including Reserve or National Guard). INDIVIDUAL REINSTATEMENT: The insurance of a terminated person may be reinstated if he/she returns to Active Work with you within the period of time as shown on the Schedule of Benefits page. He/she must also be a member of an Eligible Class, as shown on the Schedule of Benefits page, and have been: (1) on a leave of absence approved by you; or (2) on temporary lay-off. The person will not be required to fulfill the Eligibility Requirements of this Policy again. The insurance will go into effect after he/she returns to Active Work for one (1) full day. If a person returns after having resigned or having been discharged, he/she will be required to fulfill the Eligibility Requirements of this Policy again. If a person returns after terminating insurance at his/her request or for failure to pay Premium when due, proof of health acceptable to us must be submitted before he/she may be reinstated. LRS-6564-7-0208 Page 7.0 Case 3:17-cv-00491-D Document 3-1 Filed 02/24/17 Page 16 of 34 PageID 61 PREMIUMS PREMIUM PAYMENT: All Premiums are to be paid by you to us, or to an authorized agent, on or before the due date. The Premium Due Dates are stated on this Policy's face page. PREMIUM RATE: The Premium due will be the rate per $100.00 of the entire amount of Covered Monthly Earnings then in force. We will furnish to you the Premium Rate on this Policy's Effective Date and when it is changed. We have the right to change the Premium Rate: (1) when the extent of coverage is changed by amendment; (2) on any Premium Due Date after the first Policy Anniversary; (3) on any Premium Due Date on or after the first Policy Anniversary if your entire group's Covered Monthly Earnings changes by 15% or more from such group's Covered Monthly Earnings on this Policy's Effective Date; or (4) at any time if there is a change in federal or state laws, insurance programs or retirement benefits that would impact our liability. We will not change the Premium Rate due to (2) or (3) above more than once in any twelve (12) month period. We will tell you in writing at least sixty (60) days before the date of a change due to (2), (3) or (4) above. GRACE PERIOD: You may pay the Premium up to thirty-one (31) days after the date it is due. This Policy stays in force during this time. If the Premium is not paid during the grace period, this Policy will terminate. You will still owe us the Premium up to the date this Policy terminates. WAIVER OF PREMIUM: No Premium is due us for an Insured while he/she is receiving Monthly Benefits from us. Once Monthly Benefits cease due to the end of his/her Total Disability, Premium payments must begin again if insurance is to continue. LRS-6564-8 Ed. 09/13 Page 8.0 Case 3:17-cv-00491-D Document 3-1 Filed 02/24/17 Page 17 of 34 PageID 62 BENEFIT PROVISIONS INSURING CLAUSE: We will pay a Monthly Benefit if an Insured: (1) is Totally Disabled as the result of a Sickness or Injury covered by this Policy; (2) is under the regular care of a Physician; (3) has completed the Elimination Period; and (4) submits satisfactory proof of Total Disability to us. BENEFIT AMOUNT: To figure the benefit amount payable: (1) multiply an Insured's Covered Monthly Earnings by the benefit percentage(s), as shown on the Schedule of Benefits page; (2) take the lesser of the amount: (a) of step (1) above; or (b) the Maximum Monthly Benefit, as shown on the Schedule of Benefits page; and (3) subtract Other Income Benefits, as shown below, from step (2) above. We will pay at least the Minimum Monthly Benefit, as shown on the Schedule of Benefits page. OTHER INCOME BENEFITS: Other Income Benefits are: (1) disability income benefits an Insured is eligible to receive because of his/her Total Disability under any group insurance plan(s); (2) disability income benefits an Insured is eligible to receive because of his/her Total Disability under any governmental retirement system, except benefits payable under a federal government employee pension benefit; (3) all benefits (except medical or death benefits) including any settlement made in place of such benefits (whether or not liability is admitted) an Insured is eligible to receive because of his/her Total Disability under: (a) Workers' Compensation Laws; (b) occupational disease law; (c) any other laws of like intent as (a) or (b) above; and (d) any compulsory benefit law; (4) any of the following that the Insured is eligible to receive: (a) any formal salary continuance plan; (b) wages, salary or other compensation, excluding the amount allowable when engaged in Rehabilitative Employment; and (c) commissions or monies from you, including vested renewal commissions, but, excluding commissions or monies that the Insured earned prior to Total Disability which are paid after Total Disability has begun; (5) that part of disability benefits paid for by you that an Insured is eligible to receive because of his/her Total Disability under a group retirement plan; and (6) that part of Retirement Benefits paid for by you that an Insured is eligible to receive under a group retirement plan; and (7) disability or Retirement Benefits under the United States Social Security Act, the Canadian pension plans, or any other government plan for which: (a) an Insured is eligible to receive because of his/her Total Disability or eligibility for Retirement Benefits; and (b) an Insured's dependents are eligible to receive due to (a) above. Disability and early Retirement Benefits will be offset only if such benefits are elected by the Insured or if election would not reduce the amount of his/her accrued normal Retirement Benefits then funded. Retirement Benefits under number (7) above will not apply to disabilities which begin after age 70 for those Insureds already receiving Social Security Retirement Benefits while continuing to work beyond age 70. Benefits above will be estimated if the benefits: (1) have not been applied for; or (2) have been applied for and a decision is pending; or (3) have been denied and the denial may be appealed. The Monthly Benefit will be reduced by the estimated amount. If benefits have been estimated, the Monthly Benefit will be adjusted when we receive proof: (1) of the amount awarded; or (2) that benefits have been denied and the denial cannot be further appealed. LRS-6564-9-0610 Page 9.0 Case 3:17-cv-00491-D Document 3-1 Filed 02/24/17 Page 18 of 34 PageID 63 If we have underpaid any benefit for any reason, we will make a lump sum payment. If we have overpaid any benefit for any reason, the overpayment must be repaid to us. At our option, we may reduce the Monthly Benefit or ask for a lump sum refund. If we reduce the Monthly Benefit, the Minimum Monthly Benefit, if any, as shown on the Schedule of Benefits page, would not apply. Interest does not accrue on any underpaid or overpaid benefit unless required by applicable law. For each day of a period of Total Disability less than a full month, the amount payable will be 1/30th of the Monthly Benefit. COST OF LIVING FREEZE: After the initial deduction for any Other Income Benefits, the Monthly Benefit will not be further reduced due to any cost of living increases payable under these Other Income Benefits. LUMP SUM PAYMENTS: If Other Income Benefits are paid in a lump sum, the sum will be prorated over the period of time to which the Other Income benefits apply. If no period of time is given, the sum will be prorated over sixty (60) months. TERMINATION OF MONTHLY BENEFIT: The Monthly Benefit will stop on the earliest of: (1) the date the Insured ceases to be Totally Disabled; (2) the date the Insured dies; (3) the Maximum Duration of Benefits, as shown on the Schedule of Benefits page, has ended; or (4) the date the Insured fails to furnish the required proof of Total Disability. RECURRENT DISABILITY: If, after a period of Total Disability for which benefits are payable, an Insured returns to Active Work for at least six (6) consecutive months, any recurrent Total Disability for the same or related cause will be part of a new period of Total Disability. A new Elimination Period must be completed before any further Monthly Benefits are payable. If an Insured returns to Active Work for less than six (6) months, a recurrent Total Disability for the same or related cause will be part of the same Total Disability. A new Elimination Period is not required. Our liability for the entire period will be subject to the terms of this Policy for the original period of Total Disability. This Recurrent Disability section will not apply to an Insured who becomes eligible for insurance coverage under any other group long term disability insurance plan. LRS-6564-9-0610 Page 9.1 Case 3:17-cv-00491-D Document 3-1 Filed 02/24/17 Page 19 of 34 PageID 64 WORKSITE MODIFICATION PROVISION If an Insured is Totally Disabled, participating in a rehabilitation program and receiving a Monthly Benefit and he/she is able to return to Active Work should you make a modification to the Insured's worksite, then you may be eligible for Worksite Modification Reimbursement. You will be reimbursed for 100% of the actual and reasonable expenses paid for eligible worksite modifications to accommodate the Insured's return to Active Work, up to a maximum reimbursement of $2,000.00. Eligible worksite modifications include: 1. providing the Insured with a more accessible parking space or entrance; or 2. removing items from the worksite which represent barriers or hazards to the Insured; or 3. special seating, furniture or equipment for the Insured's work station; or 4. providing special training materials or translation services during the Insured's training; or 5. any other services that we deem necessary to help the Insured return to Active Work with you. In order for this reimbursement to be payable, the Insured must have a Total Disability that results solely from the Insured's inability to perform his or her Regular Occupation at your worksite. The Insured must also have the physical and mental abilities needed to perform his or her Regular Occupation or another occupation at your worksite, but only with the help of the proposed worksite modification. A worksite modification may first be proposed by either you, the Insured or his or her Physician, or by us. A written proposal must then be developed with input from you, the Insured or his or her Physician. The proposal must state the purpose of the proposed worksite modification, the times, dates and costs of the modifications. Any proposal must be in writing and is subject to our approval, your approval and the approval of the Insured prior to any reimbursement being paid. Once the worksite modification has been approved in writing, you must make the worksite modification. Upon receipt of proof satisfactory to us that the modifications for the Insured have been made as approved and you have paid the person or organization that provided the worksite modification, we will then reimburse you up to the limit shown above. LRS-6564-115-0597 Page 10.0 Case 3:17-cv-00491-D Document 3-1 Filed 02/24/17 Page 20 of 34 PageID 65 EXCLUSIONS We will not pay a Monthly Benefit for any Total Disability caused by: (1) an act of war, declared or undeclared; or (2) an intentionally self-inflicted Injury; or (3) the Insured committing a felony; or (4) an Injury or Sickness that occurs while the Insured is confined in any penal or correctional institution. LRS-6564-10-0610 Page 11.0 Case 3:17-cv-00491-D Document 3-1 Filed 02/24/17 Page 21 of 34 PageID 66 LIMITATIONS MENTAL OR NERVOUS DISORDERS: Monthly Benefits for Total Disability caused by or contributed to by mental or nervous disorders will not be payable beyond an aggregate lifetime maximum duration of twenty-four (24) months unless the Insured is in a Hospital or Institution at the end of the twenty-four (24) month period. The Monthly Benefit will be payable while so confined, but not beyond the Maximum Duration of Benefits. If an Insured was confined in a Hospital or Institution and: (1) Total Disability continues beyond discharge; (2) the confinement was during a period of Total Disability; and (3) the period of confinement was for at least fourteen (14) consecutive days; then upon discharge, Monthly Benefits will be payable for the greater of: (1) the unused portion of the twenty-four (24) month period; or (2) ninety (90) days; but in no event beyond the Maximum Duration of Benefits, as shown on the Schedule of Benefits page. Mental or Nervous Disorders are defined to include disorders which are diagnosed to include a condition such as: (1) bipolar disorder (manic depressive syndrome); (2) schizophrenia; (3) delusional (paranoid) disorders; (4) psychotic disorders; (5) depressive disorders; (6) anxiety disorders; (7) somatoform disorders (psychosomatic illness); (8) eating disorders; or (9) mental illness. SUBSTANCE ABUSE: Monthly Benefits for Total Disability due to alcoholism or drug addiction will be payable while the Insured is a participant in a Substance Abuse Rehabilitation Program. The Monthly Benefit will not be payable beyond twenty-four (24) months. If, during a period of Total Disability due to Substance Abuse for which a Monthly Benefit is payable, an Insured is able to perform Rehabilitative Employment, the Monthly Benefit, less 50% of any of the money received from this Rehabilitative Employment will be paid until: (1) the Insured is performing all the material duties of his/her Regular Occupation on a full- time basis; or (2) the end of twenty-four (24) consecutive months from the date that the Elimination Period is satisfied, whichever is earlier. All terms and conditions of the Rehabilitation Benefit will apply to Rehabilitative Employment due to Substance Abuse. "Substance Abuse" means the pattern of pathological use of a Substance which is characterized by: (1) impairments in social and/or occupational functioning; (2) debilitating physical condition; (3) inability to abstain from or reduce consumption of the Substance; or (4) the need for daily Substance use for adequate functioning. "Substance" means alcohol and those drugs included on the Department of Health, Retardation and Hospitals' Substance Abuse list of addictive drugs, except tobacco and caffeine are excluded. A Substance Abuse Rehabilitation Program means a program supervised by a Physician or a licensed rehabilitation specialist approved by us. PRE-EXISTING CONDITIONS: Benefits will not be paid for a Total Disability: (1) caused by; (2) contributed to by; or (3) resulting from; a Pre-existing Condition unless the Insured has been Actively at Work for one (1) full day following the end of twelve (12) consecutive months from the date he/she became an Insured. LRS-6564-11-0406 Page 12.0 Case 3:17-cv-00491-D Document 3-1 Filed 02/24/17 Page 22 of 34 PageID 67 "Pre-Existing Condition" means any Sickness or Injury for which the Insured received medical Treatment, consultation, care or services, including diagnostic procedures, or took prescribed drugs or medicines, during the three (3) months immediately prior to the Insured's effective date of insurance. With respect to persons electing to change their level of coverage during an approved enrollment period, any benefit increase (due to this change) will not be paid for a Total Disability: (1) caused by; (2) contributed to by; or (3) resulting from; a Pre-existing Condition unless the Insured has been Actively at Work for one (1) full day following the end of twelve (12) consecutive months from the date of the increase. "Pre-Existing Condition" means any Sickness or Injury for which the Insured received medical Treatment, consultation, care or services, including diagnostic procedures, or took prescribed drugs or medicines, during the three (3) months immediately prior to the effective date of the increase. LRS-6564-11-0406 Page 12.1 Case 3:17-cv-00491-D Document 3-1 Filed 02/24/17 Page 23 of 34 PageID 68 LIMITATIONS - OTHER LIMITED BENEFITS 1. Monthly Benefits will be limited to a total of 24 months in the Insured's lifetime for all Total Disabilities caused or contributed to by: • Chronic fatigue syndrome; or • Environmental Allergic or Reactive Illness; or • Self-Reported Conditions. No Monthly Benefits are payable beyond the 24 month maximum benefit period or the Maximum Duration of Benefits shown in the Schedule of Benefits, whichever is less. 2. Monthly Benefits will be limited to a total of 24 months in the Insured's lifetime for all Total Disabilities caused by or contributed to musculoskeletal and connective tissue disorders of the neck and back, including any disease, disorder, sprain and strain of the joints and adjacent muscles of the cervical, thoracic and lumbosacral regions and their surrounding soft tissue. No Monthly Benefits are payable beyond the 24 month maximum benefit period or the Maximum Duration of Benefits shown in the Schedule of Benefits, whichever is less. Total Disabilities caused by the following musculoskeletal and connective tissue disorders will be treated the same as any other Total Disability and the 24 month maximum benefit period will not apply: • Arthritis • Demyelinating diseases • Myelitis • Myelopathies • Osteopathies • Radiculopathies documented by electromyogram • Ruptured intervertebral discs • Scoliosis • Spinal fractures • Spinal tumors, malignancy or vascular malformations • Spondylolisthesis, Grade II or higher • Traumatic spinal cord necrosis "Environmental Allergic or Reactive Illness" means an illness which results from the Insured's inability to function due to physical or mental symptoms caused by an allergic reaction from physical contact with or exposure to any static or airborne substances. "Self-Reported Conditions" means those conditions which, when reported by the Insured's Physician, cannot be verified using generally accepted standard medical procedures and practices. Examples of such conditions include, but are not limited to, headaches, dizziness, fatigue, loss of energy, or pain. LRS-6564-117-0597 Page 13.0 Case 3:17-cv-00491-D Document 3-1 Filed 02/24/17 Page 24 of 34 PageID 69 SPECIFIC INDEMNITY BENEFIT If the Insured suffers any one of the Losses listed below from an accident resulting in an Injury, we will pay a guaranteed minimum number of Monthly Benefit payments, as shown below. However: (1) the Loss must occur within one hundred and eighty (180) days; and (2) the Insured must live past the Elimination Period. For Loss of: Number of Monthly Benefit Payments: Both Hands 46 Months Both Feet 46 Months Entire Sight in Both Eyes 46 Months Hearing in Both Ears 46 Months Speech 46 Months One Hand and One Foot 46 Months One Hand and Entire Sight in One Eye 46 Months One Foot and Entire Sight in One Eye 46 Months One Arm 35 Months One Leg 35 Months One Hand 23 Months One Foot 23 Months Entire Sight in One Eye 15 Months Hearing in One Ear 15 Months "Loss(es)" with respect to: (1) hand or foot, means the complete severance through or above the wrist or ankle joint; (2) arm or leg, means the complete severance through or above the elbow or knee joint; or (3) sight, speech or hearing, means total and irrecoverable Loss thereof. If more than one (1) Loss results from any one accident, payment will be made for the Loss for which the greatest number of Monthly Benefit payments is provided. The amount payable is the Monthly Benefit, as shown on the Schedule of Benefits page, with no reduction from Other Income Benefits. The number of Monthly Benefit payments will not cease if the Insured returns to Active Work. If death occurs after we begin paying Monthly Benefits, but before the Specific Indemnity Benefit has been paid according to the above schedule, the balance remaining at time of death will be paid to the Insured's estate, unless a beneficiary is on record with us under this Policy. Benefits may be payable longer than shown above as long as the Insured is still Totally Disabled, subject to the Maximum Duration of Benefits, as shown on the Schedule of Benefits page. LRS-6564-13 Ed. 2/83 Page 14.0 Case 3:17-cv-00491-D Document 3-1 Filed 02/24/17 Page 25 of 34 PageID 70 SURVIVOR BENEFIT - LUMP SUM We will pay a benefit to an Insured's Survivor when we receive proof that the Insured died while: (1) he/she was receiving Monthly Benefits from us; and (2) he/she was Totally Disabled for at least one hundred and eighty (180) consecutive days. The benefit will be an amount equal to 3 times the Insured's last Monthly Benefit. The last Monthly Benefit is the benefit the Insured was eligible to receive right before his/her death. It is not reduced by wages earned while in Rehabilitative Employment. A benefit payable to a minor may be paid to the minor's legally appointed guardian. If there is no guardian, at our option, we may pay the benefit to an adult that has, in our opinion, assumed the custody and main support of the minor. We will not be liable for any payment we have made in good faith. "Survivor" means an Insured's spouse. If the spouse dies before the Insured or if the Insured was legally separated, then the Insured's natural, legally adopted or step-children, who are under age twenty-five (25) will be the Survivors. If there are no eligible Survivors, payment will be made to the Insured's estate, unless a beneficiary is on record with us under this Policy. LRS-6564-14 Ed. 6/10 Page 15.0 Case 3:17-cv-00491-D Document 3-1 Filed 02/24/17 Page 26 of 34 PageID 71 WORK INCENTIVE AND CHILD CARE BENEFITS WORK INCENTIVE BENEFIT During the first twelve (12) months of Rehabilitative Employment during which a Monthly Benefit is payable, we will not offset earnings from such Rehabilitative Employment until the sum of: (1) the Monthly Benefit prior to offsets with Other Income Benefits; and (2) earnings from Rehabilitative Employment; exceed 100% of the Insured's Covered Monthly Earnings. If the sum above exceeds 100% of Covered Monthly Earnings, our Benefit Amount will be reduced by such excess amount until the sum of (1) and (2) above equals 100%. CHILD CARE BENEFIT We will allow a Child Care Benefit to an Insured if: (1) the Insured is receiving benefits under the Work Incentive Benefit; (2) the Insured's Child(ren) is (are) under 14 years of age; (3) the child care is provided by a non-relative; and (4) the charges for child care are documented by a receipt from the caregiver, including social security number or taxpayer identification number. During the twelve (12) month period in which the Insured is eligible for the Work Incentive Benefit, an amount equal to actual expenses incurred for child care, up to a maximum of $250.00 per month, will be added to the Insured's Covered Monthly Earnings when calculating the Benefit Amount under the Work Incentive Benefit. Child(ren) means: the Insured's unmarried child(ren), including any foster child, adopted child or step child who resides in the Insured's home and is financially dependent on the Insured for support and maintenance. LRS-6564-60-1009 Page 16.0 Case 3:17-cv-00491-D Document 3-1 Filed 02/24/17 Page 27 of 34 PageID 72 EXTENSION OF COVERAGE UNDER THE FAMILY AND MEDICAL LEAVE ACT AND UNIFORMED SERVICES EMPLOYMENT AND REEMPLOYMENT RIGHTS ACT (USERRA) Family and Medical Leave of Absence: We will continue the Insured's coverage in accordance with your policies regarding leave under the Family and Medical Leave Act of 1993, as amended, or any similar state law, as amended, if: (1) the premium for such Insured continues to be paid during the leave; and (2) you have approved the Insured's leave in writing and provide a copy of such approval within thirty-one (31) days of our request. As long as the above requirements are satisfied, we will continue coverage until the later of: (1) the end of the leave period required by the Family and Medical Leave Act of 1993, as amended; or (2) the end of the leave period required by any similar state law, as amended. Military Services Leave of Absence: We will continue the Insured's coverage in accordance with your policies regarding Military Services Leave of Absence under USERRA if the premium for such Insured continues to be paid during the leave. As long as the above requirement is satisfied, we will continue coverage until the end of the period required by USERRA. This Policy, while coverage is being continued under this Military Services Leave of Absence extension, does not cover any loss which occurs while on active duty in the military if such loss is caused by or arises out of such military service, including but not limited to war or any act of war, whether declared or undeclared. While the Insured is on a Family and Medical Leave of Absence for any reason other than his or her own illness, injury or disability or Military Services Leave of Absence he or she will be considered Actively at Work. Any changes such as revisions to coverage due to age, class or salary changes, as applicable, will apply during the leave except that increases in the amount of insurance, whether automatic or subject to election, will not be effective for an Insured who is not considered Actively at Work until the Insured has returned to Active Work for one (1) full day. A leave of absence taken in accordance with the Family and Medical Leave Act of 1993 or USERRA will run concurrently with any other applicable continuation of insurance provision in this Policy. The Insured's coverage will cease under this extension on the earliest of: (1) the date this Policy terminates; or (2) the end of the period for which premium has been paid for the Insured; or (3) the date such leave should end in accordance with your policies regarding Family and Medical Leave of Absence and Military Services Leave of Absence in compliance with the Family and Medical Leave Act of 1993, as amended and USERRA. Coverage will not be terminated for an Insured who becomes Totally Disabled during the period of the leave and who is eligible for benefits according to the terms of this Policy. Any Monthly Benefit which becomes payable will be based on the Insured's Covered Monthly Earnings immediately prior to the date of Total Disability. Should you choose not to continue the Insured's coverage during a Family and Medical Leave of Absence and/or Military Services Leave of Absence, the Insured's coverage will be reinstated. LRS-6564-73-0708 Page 17.0 Case 3:17-cv-00491-D Document 3-1 Filed 02/24/17 Page 28 of 34 PageID 73 EXTENDED DISABILITY BENEFIT We will pay an Extended Disability Benefit to an Insured if the Insured: (1) meets all the requirements of Total Disability of this Policy; and (2) is receiving a Total Disability Benefit under this Policy that will be exhausted because the Maximum Duration of Benefits has ended; and (3) is unable to function without another person's Direct Assistance or verbal direction due to: (a) an inability to perform at least two Activities of Daily Living (ADL) as defined; or (b) Cognitive Impairment as defined; and (4) is either: (a) confined as an Inpatient in a Skilled Nursing Home, Rehabilitation Facility or Rehabilitative Hospital in which patients receive care from licensed medical professionals; or (b) receiving Home Health Care or Hospice Care; and (5) makes a Written Request for this benefit within thirty (30) days after the Maximum Duration of Benefits has ended. The Extended Disability Benefit: (1) will be an amount equal to 85% of the Monthly Benefit after offsets with Other Income Benefits which was payable prior to the Insured qualifying for the Extended Disability Benefit up to a maximum of $5,000 per month; and (2) is payable for a maximum of sixty (60) months measured from the date that the Maximum Duration of Benefits has ended. Definitions: "Activities of Daily Living (ADL)" means: (1) Bathing - the ability to wash oneself in the tub or shower or by sponge bath from a basin without Direct Assistance; (2) Dressing - the ability to change clothes without Direct Assistance, including fastening and unfastening any medically necessary braces or artificial limbs; (3) Eating/Feeding - the ability to eat without Direct Assistance, once food has been prepared and made available; (4) Transferring - the ability to move in and out of a chair or bed without Direct Assistance, except with the aid of equipment (including support and other mechanical devices); and (5) Toileting - the ability to get to and from and on and off the toilet, to maintain a reasonable level of personal hygiene and to adjust clothing without Direct Assistance. "Cognitively Impaired" and "Cognitive Impairment" means the Insured's confusion or disorientation due to organic changes in the brain resulting in a deterioration or loss in intellectual capacity as confirmed by cognitive or other tests satisfactory to us. "Direct Assistance" means the Insured requires continuous help or oversight to be able to perform the Activity of Daily Living (ADL). "Home Health Care" means medical and non-medical services, provided in an Insured's residence due to Injury or Sickness, including: visiting nurse services; physical, respiratory, occupational or speech therapy; nutritional counseling; and home health aide services. Home Health Care services must be: (1) prescribed by and provided under the supervision of a Physician; and (2) rendered by a licensed home health care provider who is not a member of the Insured's immediate family. Home Health Care does not include: homemaker, companion and home delivered meals services; nor informal care services provided by family members of the Insured. "Hospice Care" means a program of care which coordinates the special needs of a person with a Terminal Illness. Hospice Care must be: (1) prescribed by and provided under the supervision of a Physician; and (2) rendered by a licensed hospice care provider who is not a member of the Insured's immediate family. LRS-6564-205-0501 Page 18.0 Case 3:17-cv-00491-D Document 3-1 Filed 02/24/17 Page 29 of 34 PageID 74 "Inpatient" means a person confined in a Skilled Nursing Home, Rehabilitation Facility or Rehabilitative Hospital, for whom a daily room and board charge is made. "Pre-existing Condition" means with respect to the Extended Disability Benefit only, any Sickness or Injury for which the Insured received medical treatment, consultation, care or services, including diagnostic procedures, or took prescribed drugs or medicines, during the three (3) months immediately preceding the Insured's effective date of insurance. "Rehabilitation Facility or Rehabilitative Hospital" means any facility or Hospital that is licensed in the state in which it is operating to provide rehabilitation services, therapy or retraining to the Insured to enable him or her to walk, communicate, and/or function as a member of society. "Skilled Nursing Home" means a facility or part of a facility that is licensed or certified in the state in which it is operating to provide Skilled Nursing Care. "Skilled Nursing Care" means that level of care which: (1) requires the training and skills of a Registered Nurse; (2) is prescribed by a Physician; (3) is based on generally recognized and accepted standards of health care by the American Medical Association; and (4) is appropriate for the diagnosis and treatment of the Insured's Sickness or Injury. "Terminal Illness" means a Sickness or physical condition that is certified by a Physician in a written statement, on a form prescribed by us, to reasonably be expected to result in death in less than 12 months. "Written Request" means a request made, in writing, by the Insured to us. Pre-existing Conditions Limitation With respect to the Extended Disability Benefit only, benefits will not be paid for a Total Disability: (1) caused by; (2) contributed to by; or (3) resulting from; a Pre-existing Condition unless the Insured has been Actively at Work for one (1) full day following the end of twelve (12) consecutive months measured from the Insured's effective date of insurance with us. No benefits will be paid under the Extended Disability Benefit if the Insured's Total Disability occurred before the Insured's effective date of insurance with us. The Extended Disability Benefit will cease to be payable on the earliest of the following dates: (1) the date the Insured dies; or (2) the date the Insured no longer meets the requirements of Total Disability of this Policy; or (3) the date the Insured: (a) is no longer confined as an Inpatient in a Skilled Nursing Home, Rehabilitative Facility or Rehabilitation Hospital; Or (b) is no longer receiving Home Health Care or Hospice Care; or (4) the date the Insured is no longer considered Cognitively Impaired; or (5) the date the Insured is no longer unable to perform at least two Activities of Daily Living (ADL); or (6) the date the Insured receives his or her sixtieth (60th) monthly Extended Disability Benefit payment. The Extended Disability Benefit will not be payable for Total Disability which is caused by or results from conditions for which Monthly Benefits are specifically limited by this Policy such as Mental or Nervous Disorders, alcoholism, drug addiction, or other Substance Abuse, musculoskeletal and connective tissue disorders, chronic fatigue syndrome, Environmental Allergic or Reactive Illness, or Self-Reported Conditions. LRS-6564-205-0501 Page 18.1 Case 3:17-cv-00491-D Document 3-1 Filed 02/24/17 Page 30 of 34 PageID 75 If this Policy contains a Survivor Benefit, Activities of Daily Living Benefit (ADL), Catastrophic Care Benefit, Supplemental Pension Benefit, Living Benefit, Cost of Living Benefit or a Conversion Privilege, such benefits are not applicable when receiving benefits under the Extended Disability Benefit. LRS-6564-205-0501 Page 18.2 Case 3:17-cv-00491-D Document 3-1 Filed 02/24/17 Page 31 of 34 PageID 76 REHABILITATION BENEFIT "Rehabilitative Employment" means work in Any Occupation for which the Insured's training, education or experience will reasonably allow. The work must be approved by a Physician or a licensed or certified rehabilitation specialist approved by us. Rehabilitative Employment includes work performed while Partially Disabled, but does not include performing all the material duties of his/her Regular Occupation on a full-time basis. If an Insured is receiving a Monthly Benefit because he/she is considered Totally Disabled under the terms of this Policy and is able to perform Rehabilitative Employment, we will continue to pay the Monthly Benefit less an amount equal to 50% of earnings received through such Rehabilitative Employment. If an Insured is able to perform Rehabilitative Employment when Totally Disabled due to Substance Abuse, we will continue to pay the Monthly Benefit less an amount equal to 50% of earnings received through such Rehabilitative Employment. This Monthly Benefit is payable for a maximum of twenty-four (24) consecutive months from the date the Elimination Period is satisfied. An Insured will be considered able to perform Rehabilitative Employment if a Physician or licensed or certified rehabilitation specialist approved by us determines that he/she can perform such employment. If an Insured refuses such Rehabilitative Employment, or has been performing Rehabilitative Employment and refuses to continue such employment, even though a Physician or licensed or certified rehabilitation specialist approved by us has determined that he/she is able to perform Rehabilitative Employment, the Monthly Benefit will be reduced by 50%, without regard to the Minimum Monthly Benefit. LRS-6564-82-0994 Page 19.0 Case 3:17-cv-00491-D Document 3-1 Filed 02/24/17 Page 32 of 34 PageID 77 RELIANCE STANDARD LIFE INSURANCE COMPANY AMENDATORY RIDER It is hereby understood and agreed that the Policy will be amended by the addition of the following: Applicable to Vermont Residents Only The following sections/provisions of this Policy are amended to comply with Vermont law: 1. Schedule of Benefits section, Elimination Period provision. The Elimination Period will be the lesser of the number of days shown on the Schedule of Benefits in this policy or: For Benefit Periods 2 years and greater: 365 days. For Benefit Periods greater than 1 year but less than 2 years: 180 days. Limitations section, Mental or Nervous Disorders and/or Substance Abuse, if such limitations are included in this Policy. If this Policy contains limitations in coverage for mental or nervous disorders and/or substance abuse, such limitations will not apply to Vermont residents. Coverage for these conditions will be treated the same as other conditions that may entitle the Insured to full benefits. 3. Limitations section, Pre-existing Conditions, if such limitation is included in this Policy. The pre-existing condition provision time period in the definition of Pre-existing Condition shall be the lesser of the time period shown on the Limitations form in this policy or twelve (12) months. The period of time during which the Insured becomes Totally Disabled due to a Pre-existing Condition and a benefit is not payable for such Total Disability is the lesser of the time period as shown in this policy or twelve (12) months. All other terms and conditions remain unchanged. RELIANCE STANDARD LIFE INSURANCE COMPANY Secretary LRS-8351-01-0887 Case 3:17-cv-00491-D Document 3-1 Filed 02/24/17 Page 33 of 34 PageID 78 IMPORTANT INFORMATION ABOUT COVERAGE UNDER THE TEXAS LIFE AND HEALTH INSURANCE GUARANTY ASSOCIATION (For insurers declared insolvent or impaired on or after September 1, 2011) Texas law establishes a system to protect Texas policyholders if their life or health insurance company fails. The Texas Life and Health Insurance Guaranty Association ("the Association") administers this protection system. Only the policyholders of insurance companies that are members of the Association are eligible for this protection which is subject to the terms, limitations, and conditions of the Association law. (The law is found in the Texas Insurance Code, Chapter 463.) It is possible that the Association may not protect all or part of your policy because of statutory limitations. Eligibility for Protection by the Association When a member insurance company is found to be insolvent and placed under an order of liquidation by a court or designated as impaired by the Texas Commissioner of Insurance, the Association provides coverage to policyholders who are: • Residents of Texas (regardless of where the policyholder lived when the policy was issued) • Residents of other states, ONLY if the following conditions are met: 1. The policyholder has a policy with a company domiciled in Texas; 2. The policyholder's state of residence has a similar guaranty association; and 3. The policyholder is not eligible for coverage by the guaranty association of the policyholder's state of residence. Limits of Protection by the Association Accident, Accident and Health, or Health Insurance: • For each individual covered under one or more policies: up to a total of $500,000 for basic hospital, medical-surgical, and major medical insurance, $300,000 for disability or long term care insurance, or $200,000 for other types of health insurance. Life Insurance: • Net cash surrender value or net cash withdrawal value up to a total of $100,000 under one or more policies on a single life; or • Death benefits up to a total of $300,000 under one or more policies on a single life; or • Total benefits up to a total of $5,000,000 to any owner of multiple non-group life policies. Individual Annuities: • Present value of benefits up to a total of $250,000 under one or more contracts on any one life. Group Annuities: • Present value of allocated benefits up to a total of $250,000 on any one life; or • Present value of unallocated benefits up to a total of $5,000,000 for one contractholder regardless of the number of contracts. Aggregate Limit: • $300,000 on any one life with the exception of the $500,000 health insurance limit, the $5,000,000 multiple owner life insurance limit, and the $5,000,000 unallocated group annuity limit. These limits are applied for each insolvent insurance company. Insurance companies and agents are prohibited by law from using the existence of the Association for the purpose of sales, solicitation, or inducement to purchase any form of insurance. When you are selecting an insurance company, you should not rely on Association coverage. For additional questions on Association protection or general information about an insurance company, please use the following contact information. Texas Life and Health Insurance Guaranty Association 515 Congress Avenue, Suite 1875 Austin, Texas 78701 800-982-6362 or www.txlifega.org Texas Department of Insurance P.O Box 149104 Austin, Texas 78714-9104 800-252-3439 or www.tdi.texas.gov LRS-8785-0914 Case 3:17-cv-00491-D Document 3-1 Filed 02/24/17 Page 34 of 34 PageID 79 RELIANCE STANDARD LIFE INSURANCE COMPANY 2001 Market Street, Suite 1500, Philadelphia, PA 19103-7090 IMPORTANT NOTICE To obtain information or to make a complaint: You may call Reliance Standard Life Insurance Company's toll-free telephone number for information or to make a complaint at 1-800-351-7500 You may contact the Texas Department of Insurance to obtain information on companies, coverages, rights or complaints at 1-800-252-3439 You may write the Texas Department of Insurance P.O. Box 149104 Austin, Texas 78714-9104 FAX # (512) 475-1771 Web: http://www.tdi.state.tx us E-mail: ConsumerProtection@tdi.state.tx. us PREMIUM OR CLAIM DISPUTES: Should you have a dispute concerning your premium or about a claim, you should contact the company first. If the dispute is not resolved, you may contact the Texas Department of Insurance. ATTACH THIS NOTICE TO YOUR POLICY: This notice is for information only and does not become a part or condition of the attached document. AVISO IMPORTANTE Para obtener informacion o para someter una queja: Usted puede Ilamar al numero de telefono gratis de Reliance Standard Life Insurance Company para informacion o para someter una queja al 1-800-351-7500 Puede comunicarse con el Departamento de Seguros de Texas para obtener informacion acerca de companias, coberturas, derechos o quejas al 1-800-252-3439 Puede escribir al Departamento de Seguros de Texas P.O. Box 149104 Austin, Texas 78714-9104 FAX # (512) 475-1771 Web: http://www.tdi.state.tx.us E-mail: ConsumerProtection@tdi.state.tx.us DISPUTAS SOBRE PRIMAS 0 RECLAMOS: Si tiene una disputa concerniente a su prima o a un reclamo, debe comunicarse con la compania primero. Si no se resuelve la disputa, puede entonces comunicarse con el departamento (TDI). UNA ESTE AVISO A SU POLIZA: Este aviso es solo para proposito de informacion y no se convierte en parte o condicion del documento adjunto. EXHIBIT LRS-8690-0492 B Case 3:17-cv-00491-D Document 3-2 Filed 02/24/17 Page 1 of 26 PageID 80 ( RELIANCE STANDARD LIFE INSURANCE COMPANY Home Office: Schaumburg, Illinois • Administrative Office: Philadelphia, Pennsylvania POLICYHOLDER: Stronghold, Ltd. POLICY NUMBER: GL 150887 EFFECTIVE DATE: January 1, 2013, as amended through July 1, 2016 ANNIVERSARY DATES: January 1, 2014 and each January 1st thereafter. PREMIUM DUE DATES: The first premium is due on the Effective Date. Further premiums are due monthly, in advance, on the first day of each month. The Policy is delivered in Texas and is governed by its laws. We agree to provide insurance to you in exchange for the payment of premium and a signed Application. The Policy provides benefits for loss of life from injury or sickness. It insures the eligible persons for the amount of insurance shown on the Schedule of Benefits. The insurance is subject to the terms and conditions of the Policy. The effective date of the Policy is shown above. Insurance starts and ends at 12:01 A.M., Local Time, at your main address. It stays in effect as long as premium is paid when due. The "TERMINATION OF THE POLICY" section of the GENERAL PROVISIONS explains when the insurance can be ended. The Policy is signed by the President and Secretary. attuoitag(OuphL Secretary President GROUP LIFE INSURANCE NON-PARTICIPATING This Group Life Policy amends the Group Life Policy previously issued to you by us. It is issued on June 23, 2016. LRS-6422 Ed. 2/84 Case 3:17-cv-00491-D Document 3-2 Filed 02/24/17 Page 2 of 26 PageID 81 RELIANCE STANDARD LIFE INSURANCE COMPANY Philadelphia, Pennsylvania GROUP POLICY NUMBER: GL 150887 P et. OLICY EFFECTIVE DATE: January 1, 2013, as amended through July 1, 2016 POLICY DELIVERED IN: Texas ANNIVERSARY DATE: January 1st in each year Application is made to us by: Stronghold, Ltd. This Application is completed in duplicate, one copy to be attached to your Policy and the other returned to us. It is agreed that this Application takes the place of any previous application for your Policy. Signed at this day of Policyholder: By: (Signature) (Title) Please sign and return. LRS-6422-A Ed. 3/82 *BOD* Case 3:17-cv-00491-D Document 3-2 Filed 02/24/17 Page 3 of 26 PageID 82 *BC1COAPGL 15088707/01/2016* *BC1COAPGL 15088707/01/2016*RSL *BC2COAPStronghold, Ltd. Case 3:17-cv-00491-D Document 3-2 Filed 02/24/17 Page 4 of 26 PageID 83 RELIANCE STANDARD LIFE INSURANCE COMPANY Philadelphia, Pennsylvania GROUP POLICY NUMBER: GL 150887 POLICY DELIVERED IN: Texas Application is made to us by: Stronghold, Ltd. This Application is completed in duplicate, one copy to be attached to your Policy and the other returned to us. It is agreed that this Application takes the place of any previous application for your Policy. Signed at this day of Policyholder: By: (Signature) (Title) POLICY EFFECTIVE DATE: January 1, 2013, as amended through July 1, 2016 ANNIVERSARY DATE: January 1st in each year LRS-6422-A Ed. 3/82 Case 3:17-cv-00491-D Document 3-2 Filed 02/24/17 Page 5 of 26 PageID 84 TABLE OF CONTENTS Page SCHEDULE OF BENEFITS 1.0 DEFINITIONS 2.0 GENERAL PROVISIONS 3.0 Entire Contract Changes Incontestability Records Maintained Clerical Error Misstatement of Age Assignment Conformity With State Laws Certificate of Insurance Policy Termination INDIVIDUAL ELIGIBILITY, EFFECTIVE DATE AND TERMINATION 4.0 General Group Eligible Classes Effective Date of Individual Insurance Termination of Individual Insurance Continuation of Individual Insurance CONVERSION PRIVILEGE 5.0 PREMIUMS 6.0 Premium Payment Premium Rate Grace Period BENEFICIARY AND FACILITY OF PAYMENT 7.0 SETTLEMENT OPTIONS 8.0 WAIVER OF PREMIUM IN EVENT OF TOTAL DISABILITY 9.0 ACCIDENTAL DEATH AND DISMEMBERMENT INSURANCE 10.0 SEAT BELT AND AIR BAG BENEFIT 11.0 CLAIMS PROVISIONS 12.0 EXTENSION OF COVERAGE UNDER THE FAMILY AND MEDICAL LEAVE ACT AND UNIFORMED SERVICES EMPLOYMENT AND REEMPLOYMENT RIGHTS ACT (USERRA) 13.0 PORTABILITY 14.0 GROUP TERM LIFE INSURANCE ACCELERATED BENEFIT RIDER 15.0 LRS-6422-1 Ed. 3/82 Case 3:17-cv-00491-D Document 3-2 Filed 02/24/17 Page 6 of 26 PageID 85 LRS-6422-1 Ed. 3/82 Case 3:17-cv-00491-D Document 3-2 Filed 02/24/17 Page 7 of 26 PageID 86 SCHEDULE OF BENEFITS NAME OF SUBSIDIARIES, DIVISIONS OR AFFILIATES TO BE COVERED: Cat Spec, Ltd., Specialty Tank Services, Ltd., Stronghold Inspection, Ltd., Turnkey Automation, Ltd., Premiere MI, Ltd., Elite Piping & Civil, Ltd., Elite Fabrication, Ltd., Elite Turnaround Specialist, Ltd., Stronghold Specialty, Ltd., Citadel Industrial Services, Ltd., Dorado Specialty Services, Ltd. "Affiliate" means any corporation, partnership, or sole proprietor under the common control of the Policyholder. ELIGIBLE CLASSES: Each active, Full-time Employee enrolled in the Medical Plan, except any person employed on a temporary or seasonal basis. INDIVIDUAL EFFECTIVE DATE: The first of the month coinciding with or next following the day the person becomes eligible. MINIMUM PARTICIPATION REQUIREMENTS: Percentage: 100% Number of Insureds: 10 AMOUNT OF INSURANCE: Basic Life and Accidental Death and Dismemberment: $20,000. For Insureds age 65 and over, the Amount of Basic Life and Accidental Death and Dismemberment Insurance is subject to automatic reduction. Upon the Insured's attainment of the specified age below, the Amount of Basic Life and Accidental Death and Dismemberment Insurance will be reduced to the applicable percentage. This reduction also applies to Insureds who are age 65 or over on their Individual Effective Date. Age Percentage of available or in force amount at age 64 65-69 65% 70-74 40% 75+ 20% The Life amount will be reduced by any benefit paid under the Accelerated Benefit Rider. CHANGES IN AMOUNT OF INSURANCE: Increases and decreases in the Amount of Insurance because of changes in age are effective on the Policy Anniversary Date coinciding with or next following the date of the change. Increases and decreases in the Amount of Insurance because of changes in class are effective on the date of the change. However, increases and decreases in the Amount of Insurance because of changes in Earnings are effective as explained in the definition of Earnings. With respect to increases in the Amount of Insurance, the Insured must be Actively At Work on the date of the change. If an Insured is not Actively At Work when the change should take effect, the change will take effect on the day after the Insured has been Actively At Work for one full day. CONTRIBUTIONS: Persons: Basic Insurance: 0% LRS-6422-2 Ed. 9/89 Page 1.0 Case 3:17-cv-00491-D Document 3-2 Filed 02/24/17 Page 8 of 26 PageID 87 DEFINITIONS "We," "us" and "our" means Reliance Standard Life Insurance Company "You," "your" and "yours" means the employer, union or other entity to which the Policy is issued and which is deemed the Policyholder. "Eligible Person" means a person who meets the eligibility requirements of the Policy. "Insured" means a person who meets the eligibility requirements of the Policy and is enrolled for this insurance. "Actively at work" and "active work" means the person actually performing on a Full-time basis each and every duty pertaining to his/her job in the place where and the manner in which the job is normally performed. This includes approved time off such as vacation, jury duty and funeral leave, but does not include time off as a result of injury or illness. "Full-time" means working for you for a minimum of 30 hours during a person's regularly scheduled work week. "The date he/she retires" or "retirement" means the effective date of an Insured's (1) retirement pension benefits under any plan of a federal, state, county or municipal retirement system, if such pension benefits include any credit for employment with you; (2) retirement pension benefits under any plan which you sponsor, or make or have made contributions; or (3) retirement benefits under the United States Social Security Act of 1935, as amended, or under any similar plan or act. "Earnings", as used in the SCHEDULE OF BENEFITS section, means the amount of wages you paid to the Insured as reported on his/her W-2 form for the year just before the date of loss. W-2 earnings includes base pay, commissions and bonuses received from you, but excludes overtime pay; group term life imputed income; allowances, such as, but not limited to, disturbance allowances, relocation allowances, leased car and car allowances; and other special forms of compensation. If the W-2 is for less than a full calendar year, W-2 earnings, as defined above, will be annualized. However, if the Insured was not employed by you in the calendar year just before the date of loss, "Earnings" means the Insured's basic annual salary received from you on the day just before the date of loss. "Total Disability", as used in the WAIVER OF PREMIUM IN EVENT OF TOTAL DISABILITY section, means an Insured's complete inability to engage in any type of work for wage or profit for which he/she is suited by education, training or experience. "Loss" as used in the ACCIDENTAL DEATH AND DISMEMBERMENT INSURANCE section, with respect to: (1) hand or foot, means the complete severance through or above the wrist or ankle joint; (2) the eye, speech or hearing, means total and irrecoverable loss thereof. "Injury" means accidental bodily injury to an Insured that is caused directly and independently of all other causes by accidental means and which occurs while the Insured's coverage under this Policy is in force. LRS-6422-3 Ed. 06/01 Page 2.0 Case 3:17-cv-00491-D Document 3-2 Filed 02/24/17 Page 9 of 26 PageID 88 GENERAL PROVISIONS ENTIRE CONTRACT The entire contract between you and us is the Policy, your application (a copy of which is attached at issue), and any endorsements and amendments. CHANGES No agent has authority to change or waive any part of the Policy. To be valid, any change or waiver must be in writing. It must also be signed by one of our executive officers and attached to the Policy. INCONTESTABILITY Any statement made in your application will be deemed a representation, not a warranty. We cannot contest this Policy after it has been in force for two (2) years from the date of issue, except for non-payment of premium. Any statements made by you, any Insured, or on behalf of any Insured to persuade us to provide coverage, will be deemed a representation, not a warranty. This provision limits our use of these statements in contesting the amount of insurance for which an Insured is covered. The following rules apply to each statement: (1) No statement will be used in a contest unless: (a) it is in a written form signed by the Insured, or on behalf of the Insured; and (b) a copy of such written instrument is or has been furnished to the Insured, the Insured's beneficiary or legal representative. (2) If the statement relates to an Insured's insurability, it will not be used to contest the validity of insurance which has been in force, before the contest, for at least two years during the lifetime of the Insured. RECORDS MAINTAINED You must maintain records of all Insureds. Such records must show the essential data of the insurance, including new persons, terminations, changes, etc. This information must be reported to us regularly. We reserve the right to examine the insurance records maintained at the place where they are kept. This review will only take place during normal business hours. CLERICAL ERROR Clerical errors in connection with the Policy or delays in keeping records for the Policy, whether by you, us, or the Plan Administrator: (1) will not terminate insurance that would otherwise have been effective; and (2) will not continue insurance that would otherwise have ceased or should not have been in effect. If appropriate, a fair adjustment of premium will be made to correct a clerical error. MISSTATEMENT OF AGE If an Insured's age is misstated, the premium will be adjusted. If the Insured's insurance is affected by the misstated age, it will also be adjusted. The insurance will be changed to the amount the Insured is entitled to at his/her correct age. ASSIGNMENT Ownership of any benefit provided under the Policy may be transferred by assignment. An irrevocable beneficiary must give written consent to assign this insurance. Written request for assignment must be made in duplicate at our Administrative Offices. Once recorded by us, an assignment will take effect on the date it was signed. We are not liable LRS-6422-5 Ed. 4/94 Page 3.0 Case 3:17-cv-00491-D Document 3-2 Filed 02/24/17 Page 10 of 26 PageID 89 for any action we take before the assignment is recorded. CONFORMITY WITH STATE LAWS Any section of the Policy, which on its effective date, conflicts with the laws of the state in which the Policy is issued, is amended by this provision. The Policy is amended to meet the minimum requirements of those laws. CERTIFICATE OF INSURANCE We will send to you an individual certificate for each Insured. The certificate will outline the insurance coverage and to whom benefits are payable. POLICY TERMINATION You may cancel the Policy at any time. The Policy will be cancelled on the date we receive your letter or, if later, the date requested in your letter. We may cancel the Policy if: (1) the premium is not paid at the end of the grace period; or (2) the number of Insureds is less than the Minimum Participation Number on the Schedule of Benefits; or (3) the percentage of eligible persons insured is less than the Minimum Participation Percentage on the Schedule of Benefits. If we cancel because of (1) above, the Policy will be cancelled at the end of the grace period. If we cancel because of (2) or (3) above, we will give you thirty-one (31) days written notice prior to the date of cancellation. You will still owe us any premium that is not paid up to the date the Policy is cancelled. We will return, pro-rata, any part of the premium paid beyond the date the Policy is cancelled. LRS-6422-5 Ed. 4/94 Page 3.1 Case 3:17-cv-00491-D Document 3-2 Filed 02/24/17 Page 11 of 26 PageID 90 INDIVIDUAL ELIGIBILITY, EFFECTIVE DATE AND TERMINATION GENERAL GROUP: The general group will be your employees and employees of any subsidiaries, divisions or affiliates named on the Schedule of Benefits. ELIGIBLE CLASSES: The eligible classes will be those persons described on the Schedule of Benefits. EFFECTIVE DATE OF INDIVIDUAL INSURANCE: If you pay the entire premium, the insurance for an eligible Person will go into effect on the date stated on the Schedule of Benefits. If an eligible Person pays a part of the premium, he/she must apply in writing for the insurance to go into effect. He/she will become insured on the later of: (1) the Individual Effective Date stated on the Schedule of Benefits, if he/she applies on or before that date; or (2) the first of the month coinciding with or next following the date he/she applies, if he/she applies within thirty-one (31) days from the date he/she first met the eligibility requirements; or (3) the first of the month coinciding with or next following the date we approve any required proof of good health. We require proof of good health if a person applies: (a) after thirty-one (31) days from the date he/she first becomes eligible; or (b) after he/she terminated this insurance but he/she remained in a class eligible for this insurance; or (c) for an Amount of Insurance greater than the Amount of Insurance shown on the Schedule of Benefits as not subject to our approval of a person's good health; or (d) for an Amount of Insurance greater than he/she was insured for under the prior group life insurance plan carrier, if applicable; or (e) after being eligible for coverage under a prior group life insurance plan for more than thirty-one (31) days but did not elect to be covered under that prior plan; or (4) the date premium is remitted. Changes in an Insured's amount of insurance are effective as shown on the Schedule of Benefits. If the person is not actively at work on the day his/her insurance is to go into effect, the insurance will go into effect on the day he/she returns to active work for one full day. TERMINATION OF INDIVIDUAL INSURANCE: The insurance of an Insured will terminate on the first of the following to occur: (1) the date the Policy terminates; or (2) the date the Insured ceases to be in a class eligible for this insurance; or (3) the end of the period for which premium has been paid for the Insured; or (4) the date the Insured enters military service (not including Reserve or National Guard). CONTINUATION OF INDIVIDUAL INSURANCE: The insurance of an Insured may be continued, by payment of premium, beyond the date the Insured ceases to be eligible for this insurance, but not longer than: (1) twelve (12) months, if due to illness or injury; or (2) one (1) month, if due to temporary lay-off or approved leave of absence. LRS-6422-6 Ed. 11/07 Page 4.0 Case 3:17-cv-00491-D Document 3-2 Filed 02/24/17 Page 12 of 26 PageID 91 CONVERSION PRIVILEGE An Insured can use this privilege when his/her insurance is no longer in force. It has several parts. They are A. If the insurance ceases due to termination of employment or membership in any of this Policy's classes, an individual Life Insurance Policy may be issued. The Insured is entitled to a policy without disability or supplemental benefits. A written application for the policy must be made by the Insured within thirty-one (31) days after he/she terminates. The first premium must also be paid within that time. The issuance of the policy is subject to the following conditions: (1) The policy will, at the option of the Insured, be on any one of our forms, except for term life insurance. It will be the standard type issued by us for the age and amount applied for; (2) The policy issued will be for an amount not over what the Insured had before he/she terminated; (3) The premium due for the policy will be at our usual rate. This rate will be based on the amount of insurance, class of risk and the Insured's age at date of policy issue; and (4) Proof of good health is not required. B. If the insurance ceases due to the termination or amendment of this Policy, an individual Life Insurance Policy can be issued. An Insured must have been insured for at least five (5) years under this Policy. The same rules as in A above will be used, except that the face amount will be the lesser of: (1) The amount of the Insured's Group Life benefit under this Policy. This amount will be less any amount he/she is entitled to under any group life policy issued by us or another insurance company; or (2) $2,000. C. If the insurance reduces, as may be provided in this Policy, an individual Life Insurance Policy can be issued. The same rules as in A above will be used, except that the face amount will not be greater than the amount which ceased due to the reduction. D. If an Insured dies during the time provided in A above in which he/she is entitled to apply for an individual policy, we will pay the benefit under the Group Policy that he/she was entitled to convert. This will be done whether or not the Insured applied for the individual policy. E. Any policy issued with respect to A, B or C above will be put in force at the end of the thirty-one (31) day period in which application must be made. LRS-6422-30 Ed. 9/83 Page 5.0 Case 3:17-cv-00491-D Document 3-2 Filed 02/24/17 Page 13 of 26 PageID 92 PREMIUMS PREMIUM PAYMENT: All premiums are to be paid by you to us, or to an authorized agent, on or before the due date. The premium due dates are stated on the Policy face page. PREMIUM RATE: The premium due will be the rate per $1,000 of benefit multiplied by the entire amount of benefit volume then in force. We will furnish to you the premium rate on the Policy effective date and when it is changed. We have the right to change the premium rate: (1) on any premium due date after the Policy is in force for 12 months; (2) when the extent of coverage is changed by amendment; or (3) on any premium due date on or after the Policy is in force for 12 months if the entire amount of the benefit volume changes by 15% or more from the entire amount of benefit volume on the Policy effective date. We will not change the premium rate due to (1) or (3) above more than once in any twelve (12) month period. We will tell you in writing at least sixty (60) days before the date of a change due to (1) or (3) above. GRACE PERIOD: You may pay the premium up to 31 days after the date it is due. The Policy stays in force during this time. If the premium is not paid during the grace period, the Policy will be cancelled at the end of the grace period. You will still owe us the premium up to the date the Policy is cancelled. LRS-6422-8 Ed. 07/09 Page 6.0 Case 3:17-cv-00491-D Document 3-2 Filed 02/24/17 Page 14 of 26 PageID 93 BENEFICIARY AND FACILITY OF PAYMENT BENEFICIARY: The beneficiary will be as named in writing by the Insured to receive benefits at the Insured's death. This beneficiary designation must be on file with us or the Plan Administrator and will be effective on the date the Insured signs it. Any payment made by us before receiving the designation shall fully discharge us to the extent of that payment. If the Insured names more than one beneficiary to share the benefit, he/she must state the percentage of the benefit that is to be paid to each beneficiary. Otherwise, they will share the benefit equally. The beneficiary's consent is not needed if the Insured wishes to change the designation. His/her consent is also not needed to make any changes in this Policy. If the beneficiary dies at the same time as the Insured, or within fifteen (15) days after his/her death but before we receive written proof of the Insured's death, payment will be made as if the Insured survived the beneficiary, unless noted otherwise. If the Insured has not named a beneficiary, or the named beneficiary is not surviving at the Insured's death, any benefits due shall be paid to the first of the following classes to survive the Insured: (1) the Insured's legal spouse; (2) the Insured's surviving child(ren) (including legally adopted child(ren)), in equal shares; (3) the Insured's surviving parents, in equal shares; (4) the Insured's surviving siblings, in equal shares; or, if none of the above, (5) the Insured's estate. We will not be liable for any payment we have made in good faith. FACILITY OF PAYMENT: If a beneficiary, in our opinion, cannot give a valid release (and no guardian has been appointed), we may pay the benefit to the person who has custody or is the main support of the beneficiary. Payment to a minor shall not exceed $1,000. If the Insured has not named a beneficiary, or the named beneficiary is not surviving at the Insured's death, we may pay up to $250 of the benefit to the person(s) who, in our opinion, have incurred expenses in connection with the Insured's last illness, death or burial. The balance of the benefit, if any, will be held by us, until an individual or representative: (1) is validly named; or (2) is appointed to receive the proceeds; and (3) can give valid release to us. The benefit will be held with interest at a rate set by us. We will not be liable for any payment we have made in good faith. LRS-6422-37 Ed. 11/00 Page 7.0 Case 3:17-cv-00491-D Document 3-2 Filed 02/24/17 Page 15 of 26 PageID 94 SETTLEMENT OPTIONS The Insured may elect a different way in which payment of the Amount of Insurance can be made. He/she must provide a written request to us, for our approval, at our Administrative Office. If the option covers less than the full amount due, we must be advised of what part is to be under an option. Amounts under $2,000 or option payments of less than $20.00 each are not eligible. If no instructions for a settlement option are in effect at the death of the Insured, the beneficiary may make the election, with our consent. OPTION A - FIXED TIME PAYMENT OPTION Equal monthly payments will be made for any period chosen, up to thirty (30) years. The amount of each payment depends on the amount applied, the period selected and the payment rates we are using when the first payment is due. The rate of any monthly payment will not be less than shown in the table below. We reserve the right to change it. This change will apply only to requests for settlement elected after this change. Option A Table Minimum Monthly Payment Rates for each $1,000 Applied Years Monthly Payment Years Monthly Payment Years Monthly Payment Years Monthly Payment Years Monthly Payment 1 $84.47 7 $13.16 13 $7.71 19 $5.73 25 $4.71 2 42.86 8 11.68 14 7.26 20 5.51 26 4.59 3 28.99 9 10.53 15 6.87 21 5.32 27 4.47 4 22.06 10 9.61 16 6.53 22 5.15 28 4.37 5 17.91 11 8.86 17 6.23 23 4.99 29 4.27 6 15.14 12 8.24 18 5.96 24 4.84 30 4.18 OPTION B - FIXED AMOUNT PAYMENT OPTION Each payment will be for an agreed fixed amount. The amount of each payment may not be less than $10.00 for each $1,000 applied. Interest will be credited each month on the unpaid balance and added to it. This interest will be at a rate set by us, but not less than the equivalent of 3% per year. Payments continue until the amount we hold runs out. The last payment will be for the balance only. OPTION C - INTEREST PAYMENT OPTION We will hold any amount applied under this section. Interest on the unpaid balance will be paid each month at a rate set by us. This rate will not be less than the equivalent of 3% per year. If a beneficiary dies while receiving payments under one of these options and there is no contingent beneficiary, the balance will be paid in one sum to the proper representative of the beneficiary's estate, unless otherwise agreed to in the instructions for settlement. Requests for settlement options other than the three (3) set out above may be made. A mutual agreement must be reached between the individual entitled to elect and us. LRS-6422-10 Ed. 3/82 Page 8.0 Case 3:17-cv-00491-D Document 3-2 Filed 02/24/17 Page 16 of 26 PageID 95 WAIVER OF PREMIUM IN EVENT OF TOTAL DISABILITY We will extend the Amount of Insurance during a period of Total Disability for one (1) year if: (1) the Insured becomes totally disabled prior to age 60; (2) the Total Disability begins while he/she is insured; (3) the Total Disability begins while this Policy is in force; (4) the Total Disability lasts for at least 9 months; (5) the premium continues to be paid; and (6) we receive proof of Total Disability within one (1) year from the date it began. After proof of Total Disability is approved by us, neither you or the Insured is required to pay premiums. Also, any premiums paid from the start of the Total Disability will be returned. We will ask the Insured to submit annual proof of continued Total Disability. The Amount of Insurance may then be extended for additional one (1) year periods. The Insured may be required to be examined by a Physician approved by us as part of the proof. We will not require the Insured to be examined more than once a year after the insurance has been extended two (2) full years. The Amount of Insurance extended will be limited to the amount of basic group life coverage on the life of the Insured that was in force at the time that Total Disability began excluding any additional benefits. This amount will not increase. This amount will reduce or cease at any time it would reduce or cease if the Insured had not been totally disabled. If the Insured dies, we will be liable under this extension only if written proof of death is received by us. The Amount of Insurance extended for an Insured will cease on the earliest of: (1) the date he/she no longer meets the definition of Total Disability; or (2) the date he/she refuses to be examined; or (3) the date he/she fails to furnish the required proof of Total Disability; or (4) the date he/she becomes age 70; or (5) the date he/she retires. The Insured may use the conversion privilege when this extension ceases. Please refer to the Conversion Privilege section for rules. An Insured is not entitled to conversion if he/she returns to work and is again eligible for the insurance under this Policy. If the Insured uses the conversion privilege, benefits will not be payable under the Waiver of Premium in Event of Total Disability provision unless the converted policy is surrendered to us. LRS-6422-38 Ed. 11/00 Page 9.0 Case 3:17-cv-00491-D Document 3-2 Filed 02/24/17 Page 17 of 26 PageID 96 ACCIDENTAL DEATH AND DISMEMBERMENT INSURANCE Nothing in this section will change or affect any of the terms of the Policy other than as specifically set out in this section. All the Policy provisions not in conflict with these provisions shall apply to this section. If an Insured suffers any one of the losses listed below, as a result of an Injury, we will pay the benefit shown. The loss must be caused solely by an accident that occurs while the person is insured, and must occur within 365 days of the accident. Only one benefit (the larger) will be paid for more than one loss resulting from any one accident. The Amount of Insurance can be found on the Schedule of Benefits. LOSS OF: AMOUNT OF INSURANCE: Life The Full Amount Both Hands The Full Amount Both Feet The Full Amount The Sight of Both Eyes The Full Amount Speech and Hearing The Full Amount One Hand and One Foot The Full Amount One Hand and the Sight of One Eye The Full Amount One Foot and the Sight of One Eye The Full Amount One Hand One-Half of the Amount One Foot One-Half of the Amount Speech or Hearing One-Half of the Amount The Sight of One Eye One-Half of the Amount EXCLUSIONS A benefit will not be payable for a loss: (1) caused by suicide or intentionally self-inflicted injuries; or (2) caused by or resulting from war or any act of war, declared or undeclared; or (3) to which sickness, disease or myocardial infarction, including medical or surgical treatment thereof, is a contributing factor; or (4) sustained during the Insured's commission or attempted commission of an assault or felony; or (5) to which the Insured's acute or chronic alcoholic intoxication is a contributing factor; or (6) to which the Insured's voluntary consumption of an illegal or controlled substance or a non-prescribed narcotic or drug is a contributing factor. LRS-6422-33 Ed. 06/01 Page 10.0 Case 3:17-cv-00491-D Document 3-2 Filed 02/24/17 Page 18 of 26 PageID 97 SEAT BELT AND AIR BAG BENEFIT Seat Belt Benefit We will pay an additional Seat Belt Benefit if, due to an Injury sustained while driving or riding in a private passenger Four-Wheel Vehicle, the Insured suffers loss of life for which an Accidental Death Benefit is payable under the Policy. Once we receive the police accident report which confirms that the Insured was properly strapped in a Seat Belt at the time of the accident, we will pay a benefit equal to 10% of the Accidental Death Benefit payable under the Policy. If the police report does not clearly establish that the Insured was or was not wearing a Seat Belt at the time of the accident which caused the Insured's death, the benefit payable will be $1,000 in lieu of the benefit described above. "Seat Belt" means an unaltered factory-installed lap and/or shoulder restraint designed to keep a person steady in a seat. Air Bag Benefit In addition to the Seat Belt Benefit, we will also pay an Air Bag Benefit if such private passenger Four-Wheel Vehicle is equipped with a factory-installed Air Bag and the police accident report clearly establishes that the Insured was positioned in a seat which is designed to be protected by an Air Bag and was properly strapped in the Seat Belt when the Air Bag inflated. Once we receive the police accident report which confirms that the Air Bag inflated properly upon impact, we will pay a benefit equal to 5% of the Accidental Death Benefit payable under the Policy. "Air Bag" means an unaltered factory-installed supplemental restraint system designed to inflate upon impact to protect a person from bodily injury during an accident. "Four-Wheel Vehicle" means a private passenger automobile, a truck-type vehicle which has a manufacturer's rated load capacity of 2,000 pounds or less, or a self-propelled motor home, all of which are registered for private passenger use and designated for transportation on public roadways. Maximum Benefit Payable - The total combined maximum benefit payable under the Seat Belt and Air Bag Benefit is $25,000. EXCLUSIONS No benefit is payable for any loss sustained by the Insured: (1) if he/she was driving or riding in any private passenger Four-Wheel Vehicle which was being used in a race, speed or endurance test, or for acrobatic or stunt driving at the time of the accident; (2) if the Insured was not wearing a Seat Belt for any reason; (3) while the Insured was sharing a Seat Belt; or (4) due to a defect in the Air Bag diagnostic system. LRS-6422-167 Ed. 10/05 Page 11.0 Case 3:17-cv-00491-D Document 3-2 Filed 02/24/17 Page 19 of 26 PageID 98 CLAIMS PROVISIONS NOTICE OF CLAIM: Written notice must be given to us within thirty-one (31) days after the Loss occurs, or as soon as reasonably possible. The notice should be sent to us at our Administrative Offices or to our authorized agent. The notice should include the Insured's name, the Policy Number and your name. CLAIM FORMS: When we receive written notice of a claim, we will send claim forms to the claimant within fifteen (15) days. If we do not, the claimant will satisfy the requirements of written proof of loss by sending us written proof as shown below. The proof must describe the occurrence, extent and nature of the loss. PROOF OF LOSS: For any covered Loss, written proof must be sent to us within ninety (90) days. If it is not reasonably possible to give proof within ninety (90) days, the claim is not affected if the proof is sent as soon as reasonably possible. In any event, proof must be given within 1 year, unless the claimant is legally incapable of doing so. PAYMENT OF CLAIMS: Payment will be made as soon as proper proof is received. All benefits will be paid to the Insured if living. Any benefits unpaid at the time of death, or due to death, will be paid to the beneficiary. PHYSICAL EXAMINATION: At our own expense, we will have the right to have an Insured examined as reasonably necessary when a claim is pending. We can have an autopsy made unless prohibited by law. LEGAL ACTION: No legal action may be brought against us to recover on this Policy within sixty (60) days after written proof of loss has been given as required by this Policy. No action may be brought after three (3) years (Kansas, five (5) years; South Carolina and Michigan, six (6) years) from the time written proof of loss is required to be submitted. LRS-6422-72 Ed. 4/94 Page 12.0 Case 3:17-cv-00491-D Document 3-2 Filed 02/24/17 Page 20 of 26 PageID 99 EXTENSION OF COVERAGE UNDER THE FAMILY AND MEDICAL LEAVE ACT AND UNIFORMED SERVICES EMPLOYMENT AND REEMPLOYMENT RIGHTS ACT (USERRA) Family and Medical Leave of Absence: We will continue the Insured's coverage and that of any Insured Dependent, if applicable, in accordance with your policies regarding leave under the Family and Medical Leave Act of 1993, as amended, or any similar state law, as amended, if: (1) the premium for such Insured and his/her Insured Dependents, if applicable, continues to be paid during the leave; and (2) you have approved the Insured's leave in writing and provide a copy of such approval within thirty-one (31) days of our request. As long as the above requirements are satisfied, we will continue coverage until the later of: (1) the end of the leave period required by the Family and Medical Leave Act of 1993, as amended; or (2) the end of the leave period required by any similar state law, as amended. Military Services Leave of Absence: We will continue the Insured's coverage and that of any Insured Dependents, if applicable, in accordance with your policies regarding Military Services Leave of Absence under USERRA if the premium for such Insured and his or her Insured Dependents, if applicable, continues to be paid during the leave. As long as the above requirement is satisfied, we will continue coverage until the end of the period required by USERRA. This Policy, while coverage is being continued under this Military Services Leave of Absence extension, does not cover any loss which occurs while on active duty in the military if such loss is caused by or arises out of such military service, including but not limited to war or any act of war, whether declared or undeclared. While the Insured is on a Family and Medical Leave of Absence for any reason other than his or her own illness, injury or disability or Military Services Leave of Absence he or she will be considered Actively at Work. Any changes such as revisions to coverage due to age, class or salary changes, as applicable, will apply during the leave except that increases in the amount of insurance, whether automatic or subject to election, will not be effective for an Insured who is not considered Actively at Work until the Insured has returned to Active Work for one (1) full day. A leave of absence taken in accordance with the Family and Medical Leave Act of 1993 or USERRA will run concurrently with any other applicable continuation of insurance provision in this Policy. The Insured's coverage and that of any Insured Dependents, if applicable, will cease under this extension on the earliest of: (1) the date this Policy terminates; or (2) the end of the period for which premium has been paid for the Insured; or (3) the date such leave should end in accordance with your policies regarding Family and Medical Leave of Absence and Military Services Leave of Absence in compliance with the Family and Medical Leave Act of 1993, as amended and USERRA. Should you choose not to continue the Insured's coverage during a Family and Medical Leave of Absence and/or Military Services Leave of Absence, the Insured's coverage as well as any dependent coverage, if applicable, will be reinstated. LRS-6422-678 Ed. 06/08 Page 13.0 Case 3:17-cv-00491-D Document 3-2 Filed 02/24/17 Page 21 of 26 PageID 100 PORTABILITY An Insured may continue insurance coverage under this Policy if coverage would otherwise terminate because he/she ceases to be an Eligible Person, for reasons other than the termination of this Policy, or the Insured's retirement, provided he/she: (1) notifies us in writing within thirty-one (31) days from the date he/she ceases to be eligible; and (2) remits the necessary premiums when due; and (3) is not approved for extension of coverage under the Waiver of Premium in Event of Total Disability provision, if applicable; and (4) has not been terminated under the Waiver of Premium in Event of Total Disability provision, if applicable, and (5) has been covered for twelve (12) months under this Policy and/or the prior group life insurance policy. Such coverage may be continued for a period of two (2) years beginning on the date he/she is no longer an Eligible Person. The amount of coverage available under the Portability provision will be the current amount of coverage the Insured is insured for under this Policy on the last day he/she was Actively at Work. However, the amount of coverage will never be more than: (1) the highest amount of life insurance available to Eligible Persons; or (2) a total of $500,000 from all RSL group life and accidental death and dismemberment insurance combined, whichever is less. The premium charged to continue coverage will be based on the prevailing rate charged to Insureds who choose to continue coverage under the Portability provision. Such premium will be billed directly to the Insured on a quarterly, semi-annual or annual basis. If an Insured's coverage under this Policy includes Accidental Death and Dismemberment, then such benefits may be continued under this Policy. Insurance coverage continued under this provision for an Insured will terminate on the first of the following to occur: (1) the date this Policy terminates; or (2) the end of the period for which premium has been paid; or (3) the date the Insured is covered under another group term life insurance policy; or (4) at the end of the two (2) year period; or (5) at any time coverage would normally terminate according to the terms of this Policy had the Insured continued to be an Eligible Person. In addition, coverage will reduce at any time it would normally reduce according to the terms of this Policy had the Insured continued to be an Eligible Person. If insurance coverage terminates due to (1) or (4) above, it may be converted to an individual life insurance policy. The conversion will be subject to the terms and conditions set forth under the Conversion Privilege. LRS-6422-88 Ed. 07/05 Page 14.0 Case 3:17-cv-00491-D Document 3-2 Filed 02/24/17 Page 22 of 26 PageID 101 GROUP TERM LIFE INSURANCE ACCELERATED BENEFIT RIDER THIS RIDER ADDS AN ACCELERATED BENEFIT PROVISION. RECEIPT OF THIS ACCELERATED BENEFIT WILL REDUCE THE DEATH BENEFIT. THE ACCELERATION OF LIFE INSURANCE BENEFITS OFFERED UNDER THIS RIDER IS INTENDED TO QUALIFY FOR FAVORABLE TAX TREATMENT UNDER THE INTERNAL REVENUE CODE OF 1986. IF THE ACCELERATION OF LIFE INSURANCE BENEFITS IS TAX-QUALIFIED UNDER THE INTERNAL REVENUE CODE OF 1986, THE BENEFITS WILL NOT BE TAXABLE. TAX LAWS RELATING TO ACCELERATION OF LIFE INSURANCE BENEFITS ARE COMPLEX. THE INSURED IS ADVISED TO CONSULT WITH A QUALIFIED TAX ADVISOR ABOUT THE TAX CONSEQUENCES OF OBTAINING ACCELERATION OF LIFE INSURANCE BENEFITS. RECEIPT OF ACCELERATION OF LIFE INSURANCE BENEFITS MAY AFFECT YOUR, YOUR SPOUSE OR YOUR FAMILY'S ELIGIBILITY FOR PUBLIC ASSISTANCE PROGRAMS SUCH AS MEDICAL ASSISTANCE (MEDICAID), AID TO FAMILIES WITH DEPENDENT CHILDREN (AFDC), SUPPLEMENTARY SOCIAL SECURITY INCOME (SSI), AND DRUG ASSISTANCE PROGRAMS. YOU ARE ADVISED TO CONSULT WITH A QUALIFIED TAX ADVISOR AND WITH SOCIAL SERVICE AGENCIES CONCERNING HOW RECEIPT OF SUCH A PAYMENT WILL AFFECT YOU, YOUR SPOUSE AND YOUR FAMILY'S ELIGIBILITY FOR PUBLIC ASSISTANCE. Attached to Group Policy Number: GL 150887 Issued to Group Policyholder: Stronghold, Ltd. This Rider is attached to and made a part of the Policy indicated above. The Policy is hereby amended, in consideration of the application for this coverage, by the addition of the following benefit. In this Rider, Reliance Standard Life Insurance Company will be referred to as "we", "us", "our. DEFINITIONS: This section gives the meaning of terms used in this Rider. The Definitions of the Policy and Certificate also apply unless they conflict with Definitions given here. "Certified" or "Certification" refers to a written statement, made by a Physician on a form provided by us, as to the Insured's Terminal Illness. "Certificate" means the document, issued to each Insured, which explains the terms of his coverage under the Group Life Insurance Policy. "Death Benefit" means the insurance amount payable under the Policy at the death of the Insured, subject to all Policy provisions dealing with changes in the amount of insurance and reductions or termination for age or retirement. It does not include any amount that is only payable in the event of Accidental Death. "Insured" means only a primary Insured. Dependents are not eligible for coverage under this Accelerated Benefit Rider. "Physician" means a duly licensed practitioner, acting within the scope of his license, who is recognized by the law of the state in which diagnosis is received. The Physician may not be the Insured or a member of his immediate family. "Policy" means the Group Life Insurance Policy issued to the Group Policyholder under which the Insured is covered. "Terminally III" or "Terminal Illness" refers to an Insured's illness or physical condition that is Certified by a Physician to reasonably be expected to result in death in 24 months or less. "Written Request" means a request made, in writing, by the Insured to us. All pronouns include either gender unless the context indicates otherwise. DESCRIPTION OF COVERAGE: This benefit is payable to the Insured if, after having been covered under this Rider for at least 60 days, an Insured is Certified as Terminally III. In order for this benefit to be paid: (1) the Insured must make a Written Request; and (2) we must receive from any assignee or irrevocable beneficiary their signed acknowledgment and agreement to payment of this benefit. LRS-8596-001-0198-C Page 15.0 Case 3:17-cv-00491-D Document 3-2 Filed 02/24/17 Page 23 of 26 PageID 102 We may, at our option, confirm the terminal diagnosis with a second medical exam performed at our own expense. If the second medical exam produces a conflicting diagnosis, we would arrange for a third medical exam to be performed at our own expense. The initial terminal diagnosis would then be honored only if it is confirmed by the third opinion. AMOUNT OF THE ACCELERATED BENEFIT: The Accelerated Benefit will be an amount equal to 75% of the Death Benefit applicable to the Insured under the Policy on the date of the Certification of Terminal Illness, subject to a maximum benefit of $500,000. This benefit may be paid as a single lump sum or in installment payments mutually agreed to by us and the Insured. The Accelerated Benefit is payable one time only for any Insured under this Rider. EFFECT OF BENEFIT: If an Insured becomes eligible for, and elects to receive this benefit, it will have the following effects: (1) The Death Benefit payable for such Insured will be reduced by the amount equal to the Accelerated Benefit paid to such Insured. The amount of the Accelerated Benefit plus the corresponding Death Benefit will not exceed the amount that would have been paid as the Death Benefit in the absence of this Rider. (2) Any amount of insurance that would otherwise be continued under a Waiver of Premium provision will be reduced proportionately, as will the maximum Face Amount available under the Conversion Privilege. If the Insured elects to receive the Accelerated Benefit, we will send him (and any irrevocable beneficiary) a statement showing the effect that payment of this benefit will have on the death benefit. MISSTATEMENT OF AGE OR SEX: The Accelerated Benefit will be adjusted to reflect the amount of benefit that would have been purchased by the actual premium paid at the correct age and sex. TERMINATION OF AN INDIVIDUAL'S COVERAGE UNDER THIS RIDER: The coverage of any Insured under this Rider will terminate on the first of the following: (1) the date his coverage under the Policy terminates; (2) the date of payment of the Accelerated Benefit for his Terminal Illness; or (3) the date he attains age 75. ADDITIONAL PROVISIONS: This Rider takes effect on the Effective Date shown. It will terminate on the date the Group Policy terminates. It is subject to all the terms of the Group Policy not inconsistent herein. In witness whereof, we have caused this Rider to be signed by our Secretary. Secretary LRS-8596-001-0198-C Page 15.1 Case 3:17-cv-00491-D Document 3-2 Filed 02/24/17 Page 24 of 26 PageID 103 IMPORTANT INFORMATION ABOUT COVERAGE UNDER THE TEXAS LIFE AND HEALTH INSURANCE GUARANTY ASSOCIATION (For insurers declared insolvent or impaired on or after September 1, 2011) Texas law establishes a system to protect Texas policyholders if their life or health insurance company fails. The Texas Life and Health Insurance Guaranty Association ("the Association") administers this protection system. Only the policyholders of insurance companies that are members of the Association are eligible for this protection which is subject to the terms, limitations, and conditions of the Association law. (The law is found in the Texas Insurance Code, Chapter 463.) It is possible that the Association may not protect all or part of your policy because of statutory limitations. Eligibility for Protection by the Association When a member insurance company is found to be insolvent and placed under an order of liquidation by a court or designated as impaired by the Texas Commissioner of Insurance, the Association provides coverage to policyholders who are: • Residents of Texas (regardless of where the policyholder lived when the policy was issued) • Residents of other states, ONLY if the following conditions are met: 1. The policyholder has a policy with a company domiciled in Texas; 2. The policyholder's state of residence has a similar guaranty association; and 3. The policyholder is not eligible for coverage by the guaranty association of the policyholder's state of residence. Limits of Protection by the Association Accident, Accident and Health, or Health Insurance: • For each individual covered under one or more policies: up to a total of $500,000 for basic hospital, medical-surgical, and major medical insurance, $300,000 for disability or long term care insurance, or $200,000 for other types of health insurance. Life Insurance: • Net cash surrender value or net cash withdrawal value up to a total of $100,000 under one or more policies on a single life; or • Death benefits up to a total of $300,000 under one or more policies on a single life; or • Total benefits up to a total of $5,000,000 to any owner of multiple non-group life policies. Individual Annuities: • Present value of benefits up to a total of $250,000 under one or more contracts on any one life. Group Annuities: • Present value of allocated benefits up to a total of $250,000 on any one life; or • Present value of unallocated benefits up to a total of $5,000,000 for one contractholder regardless of the number of contracts. Aggregate Limit: • $300,000 on any one life with the exception of the $500,000 health insurance limit, the $5,000,000 multiple owner life insurance limit, and the $5,000,000 unallocated group annuity limit. These limits are applied for each insolvent insurance company. Insurance companies and agents are prohibited by law from using the existence of the Association for the purpose of sales, solicitation, or inducement to purchase any form of insurance. When you are selecting an insurance company, you should not rely on Association coverage. For additional questions on Association protection or general information about an insurance company, please use the following contact information. Texas Life and Health Insurance Guaranty Association 515 Congress Avenue, Suite 1875 Austin, Texas 78701 800-982-6362 or www.txlifega.org Texas Department of Insurance P.O. Box 149104 Austin, Texas 78714-9104 800-252-3439 or www.tdi.texas.gov LRS-8785-0914 Case 3:17-cv-00491-D Document 3-2 Filed 02/24/17 Page 25 of 26 PageID 104 RELIANCE STANDARD LIFE INSURANCE COMPANY 2001 Market Street, Suite 1500, Philadelphia, PA 19103-7090 IMPORTANT NOTICE To obtain information or to make a complaint: You may call Reliance Standard Life Insurance Company's toll-free telephone number for information or to make a complaint at 1-800-351-7500 You may contact the Texas Department of Insurance to obtain information on companies, coverages, rights or complaints at 1-800-252-3439 You may write the Texas Department of Insurance P.O. Box 149104 Austin, Texas 78714-9104 FAX # (512) 475-1771 Web: http://www.tdi.state.tk us E-mail: ConsumerProtection@tdi.state.tx.us AVISO IMPORTANTE Para obtener informacion o para someter una queja: Usted puede Ilamar al numero de telefono gratis de Reliance Standard Life Insurance Company para informacion o para someter una queja al 1-800-351-7500 Puede comunicarse con el Departamento de Seguros de Texas para obtener informacion acerca de companias, coberturas, derechos o quejas al 1-800-252-3439 Puede escribir al Departamento de Seguros de Texas P.O. Box 149104 Austin, Texas 78714-9104 FAX # (512) 475-1771 Web: http://www.tdi.state.tx.us E-mail: ConsumerProtection@tdi.state.tx.us PREMIUM OR CLAIM DISPUTES: Should you have a dispute concerning your premium or about a claim, you should contact the company first. If the dispute is not resolved, you may contact the Texas Department of Insurance. ATTACH THIS NOTICE TO YOUR POLICY: This notice is for information only and does not become a part or condition of the attached document. DISPUTAS SOBRE PRIMAS 0 RECLAMOS: Si tiene una disputa concerniente a su prima o a un reclamo, debe comunicarse con la compania primero. Si no se resuelve la disputa, puede entonces comunicarse con el departamento (TDI). UNA ESTE AVISO A SU POLIZA: Este aviso es solo para proposito de informacion y no se convierte en parte o condicion del documento adjunto. LRS-8690-0492 Case 3:17-cv-00491-D Document 3-2 Filed 02/24/17 Page 26 of 26 PageID 105 !RELIANCE STANDARD LIFE INSURANCE COMPANY P.O. Box 8330 Philadelphia, PA 19101-8330 (800) 351-7500 Fax (267) 256-4262 A MEMBER OF THE TOKIO MARINE GROUP January 10, 2017 Allen Williams 4837 Terrace Trail Ft Worth, TX 76114 Re: Claimant: Allen Williams Policy No: LTD 123598 Claim No: 2016-04-21-0070-LTD-01 Policyholder: Stronghold, Ltd. Dear Mr. Williams: We would like to like to express our appreciation for your patience and cooperation during the review of your claim for Long Term Disability (LTD) benefits. We have now completed our determination regarding your eligibility for benefits under the above group LTD policy. To be eligible for benefits, the group policy requires that you meet certain eligibility requirements. The policy states the following regarding eligibility: ELIGIBILITY REQUIREMENTS: A person is eligible for insurance under this Policy if he/she is a member of an Eligible Class, as shown on the Schedule of Benefits page. ELIGIBLE CLASSES: Each active, Full-time Employee, except any person employed on a temporary or seasonal basis. EFFECTIVE DATE OF INDIVIDUAL INSURANCE: If you pay the entire Premium due for an Eligible Person, the insurance for such Eligible Person will go into effect on the Individual Effective Date, as shown on the Schedule of Benefits page. If an Eligible Person pays a part of the Premium, he/she must apply in writing for the insurance to go into effect. He/she will become insured on the latest of (1) the Individual Effective Date as shown on the Schedule of Benefits page, if he/she applies on or before that date; (2) on the first of the month coinciding with or next following the date he/she applies, if he/she applies within thirty-one (31) days from the date he/she first met the Eligibility Requirements; or (3) on the first of the month coinciding with or next following the date we approve any required proof of health acceptable to us, We require this proof i f a person applies: (a) after thirty-one (31) days from the date he/she first met the Eligibility Requireme EXHIBIT 1 C Case 3:17-cv-00491-D Document 3-3 Filed 02/24/17 Page 1 of 4 PageID 106 (b) after he/she terminated this insurance but remained in an Eligible Class as shown on the Schedule of Benefits page; or (c) after being eligible for coverage under a prior plan for more than thirty-one (31) days but did not elect to be covered under that prior plan. The insurance for an Eligible Person will not go into effect on a date he/she is not Actively at Work because of a Sickness or Injury. The insurance will go into effect after the person is Actively at Work for one (1) full day in an Eligible Class, as shown on the Schedule of Benefits page. TERMINATION OF INDIVIDUAL INSURANCE: The insurance of an Insured will terminate on the first of the following to occur: (1) the date this Policy terminates; (2) the date the Insured ceases to meet the Eligibility Requirements; (3) the end of the period for which Premium has been paid for the Insured; or (4) the date the Insured enters military service (not including Reserve or National Guard). INDIVIDUAL REINSTATEMENT: The insurance of a terminated person may be reinstated if he/she returns to Active Work with you within the period of time as shown on the Schedule of Benefits page. He/she must also be a member of an Eligible Class, as shown on the Schedule of Benefits page, and have been: (1) on a leave of absence approved by you; or (2) on temporary lay-off. The person will not be required to fulfill the Eligibility Requirements of this Policy again. The insurance will go into effect after he/she returns to Active Work for one (1) full day. If a person returns after having resigned or having been discharged, he/she will be required to fulfill the Eligibility Requirements of this Policy again. If a person returns after terminating insurance at his/her request or for failure to pay Premium when due, proof of health acceptable to us must be submitted before he/she may be reinstated. Our investigation has revealed that you ceased working as a Welder/Crane Operator on April 1, 2016. According to the documentation submitted by Stronghold, Ltd., you were deemed to be a full time employee as of November 14, 2012 and you applied for Long Term Disability coverage on January 22, 2013. Based on the policy information noted above, you did not apply for Long Term Disability coverage within thirty one days of the date you first became eligible for coverage, and no acceptable proof of good health was submitted and/or approved, therefore, you are not eligible for coverage under the terms of Policy LTD 123598 and your claim has been denied. We regret our decision could not be more favorable. Our determination has been based on the information contained in your file and the policy provisions applicable to your claim. RSL understands that you may continue to pursue Social Security Disability (SSD) benefits and that a decision will be pending. RSL requires that you provide it with a copy of any favorable Social Security determination, as such awards may affect the amount of benefits you were entitled to receive under the terms of your Policy. In some instances, you may be entitled to additional benefits. In other instances, an overpayment of your LTD claim may result due to your receipt of retroactive SSD benefits for the same period that RSL paid LTD benefits. This Case 3:17-cv-00491-D Document 3-3 Filed 02/24/17 Page 2 of 4 PageID 107 obligation to update RSL on the status of your SSDI claim continues, even though your LTD claim may be ending. Sometime ago during the course of your claim, RSL advised you of the benefits of applying for SSDI and had suggested that it may be in your best interest to apply. This suggestion was made after a review of your file by a Social Security Analyst in our office who felt that information in your claim file at that time suggested that your condition might qualify you to receive SSDI benefits. However, new information or the lack thereof has been obtained by RSL that has led us to conclude you are no longer eligible to receive LTD benefits under our Policy. This additional information has been described above. Please note that while we consider the determinations of Social Security and other insurers, they are not binding on RSL's decision as to whether or not you meet the definition of "Total Disability" as set forth in your Policy. A person's entitlement to each of these benefits may be based upon a different set of guidelines, which sometimes may lead to differing conclusions. In addition, each benefit provider may also be considering different medical evidence in the evaluation of a claim. In any event, the receipt of SSDI benefits does not guarantee the receipt of LTD benefits or vice versa. You may request a review of this determination by submitting your request in writing to: Reliance Standard Life Insurance Company Quality Review Unit P.O. Box 8330 Philadelphia, PA 19101-8330 This written request for review must be submitted within 180 days of your receipt of this letter. Your request should state any reasons why you feel this determination is incorrect, and should include any written comments, documents, records, or other information relating to your claim for benefits, including but not limited to any information submitted in conjunction with any claim for Social Security disability or other benefits which you would like us to consider. Only one review will be allowed, and your request must be submitted within 180 days of your receipt of this letter to be considered. Any such review will be conducted by an individual who is neither the individual who made the underlying determination that is the subject of the review, nor the subordinate of such individual. Under normal circumstances, you will be notified in writing of the final determination within 45 days of the date we receive your request for review. If we determine that special circumstances require an extension of time for processing, you will ordinarily be notified of the decision no later than 90 days from the date we receive your request for review. We will, upon specific request and free of charge, provide copies of all documents, records, and/or other information relevant to your claim for benefits. We will also, upon specific request and free of charge, provide copies of any internal rule, guideline, protocol or other similar criterion (if any) relied upon in making this determination. In the event that your claim is subject to the Employee Retirement Income Security Act of 1974 ("the Act"), you have the right to bring a civil action under section 502(a) of the Act following an adverse benefit determination on review. Your failure to request a review within 180 days of your receipt of this letter may constitute a failure to exhaust the administrative remedies available under the Act, and effect your ability to bring civil action under the Act. Case 3:17-cv-00491-D Document 3-3 Filed 02/24/17 Page 3 of 4 PageID 108 Nothing in this letter should be construed as a waiver of any of Reliance Standard Life Insurance Company's rights and defenses under the above policy, and all these rights and defenses are reserved to the Company, whether or not specifically mentioned herein. If you have any questions regarding this matter, please feel free to contact us at 1-800-351-7500. Sincerely, eleiv;ae Da,d14-ff,‘"&.&•t Cherise Dandy-Miller LTD Claims Department Case 3:17-cv-00491-D Document 3-3 Filed 02/24/17 Page 4 of 4 PageID 109 IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF TEXAS DALLAS DIVISION ALLEN WILLIAMS Plaintiff, vs. C.A. NO. 3:17-CV-00491-D SPECIALTY TANK SERVICES, LTD., AND RELIANCE STANDARD LIFE INSURANCE COMPANY, Defendant. ORDER GRANTING DEFENDANT RELIANCE STANDARD LIFE INSURANCE COMPANY'S MOTION TO DISMISS PLAINTIFF'S CLAIMS PURSUANT TO FED. R. CIV. P. 12(b)(6) ON THIS DAY, came to be heard Defendant Reliance Standard Life Insurance Company's Motion to Dismiss Plaintiff's claims and causes of action pursuant to Fed. R. Civ. P. 12(b)(6). Having considered the Motion and any Response filed by Plaintiff, the Court finds that Defendant's motion is well-taken and should be GRANTED. It is therefore ORDERED that Plaintiff's claims and causes of action against Defendant Reliance Standard Life Insurance Company are hereby DISMISSED pursuant to FED. R. CIV. P. 1 2(b)(6). Signed this day of , 2017. UNITED STATES DISTRICT JUDGE Case 3:17-cv-00491-D Document 3-4 Filed 02/24/17 Page 1 of 1 PageID 110
