PINPOINT PTY LIMITED V CIGNA LIFE INSURANCE NEW ZEALAND LIMITED CA CA49/2008

PINPOINT PTY LIMITED V CIGNA LIFE INSURANCE NEW ZEALAND LIMITED CA CA49/2008 26 February 2009IN THE COURT OF APPEAL OF NEW ZEALAND CA49/2008 [2009] NZCA 41BETWEEN PINPOINT PTY LIMITED Appellant AND CIGNA LIFE INSURANCE NEW ZEALAND LIMITED Respondent Hearing: 27 November 2008 Court: Glazebrook, Arnold and Baragwanath JJ Counsel: J B M Smith and D K Croft for Appellant S L Rees-Thomas and B E Ross for Respondent Judgment: 26 February 2009 at 3.00 pmJUDGMENT OF THE COURT A The appeal is dismissed. B The appellant must pay to the respondent costs for a standard appeal on a band A basis and usual disbursements. We certify for second counsel.____________________________________________________________________REASONS OF THE COURT(Given by Glazebrook J)Introduction[1] This appeal concerns a credit card loyalty programme, based on Visa credit cards issued by ANZ Banking Group (New Zealand) Limited (ANZ) and co-branded in the names of Qantas Airways Limited (Qantas) and Telstra New Zealand Limited (Telstra). Pinpoint Pty Limited was the manager of the programme and, along with ANZ, Qantas and Telstra, a programme partner. Each of the programme partners had the right to market certain goods and services to cardholders. [2] Pinpoint arranged for Cigna Life Insurance New Zealand Limited (Cigna) to market a range of insurance products to cardholders. One such product was "CardSecure", a revolving credit insurance policy, whereby Cigna insured the credit card indebtedness of cardholders. The premiums were based on the monthly outstanding balances on those credit cards and were calculated and deducted by ANZ. In a practical sense, the policies could not continue without ANZ fulfilling that role as Cigna did not have access to the information about outstanding balances that would have allowed it to calculate the premiums. [3] The arrangement between Pinpoint and Cigna relating to the marketing of insurance to ANZ cardholders was recorded in a letter dated 2 March 1999 (attached as an Appendix to this judgment). It has consistently been called the Letter Agreement by the parties. Although it is noted in the Letter Agreement that the parties would formalise the arrangements, this was not done. [4] In February 2004, the loyalty programme was terminated by Qantas, as it was entitled to do under the arrangements between the programme partners. Cigna took the view that with the end of the loyalty programme, it was no longer obliged to pay Pinpoint the amounts set out in the Letter Agreement. Cigna gave notice that the Letter Agreement would come to an end on the termination of the loyalty programme and that no further payments would be made to Pinpoint. Proceedings resulted and, in Pinpoint Pty Ltd v Cigna Life Insurance New Zealand Ltd HC WN CIV-2004-485-2437 19 December 2007, Clifford J found largely in favour of Cigna.[5] Pinpoint appeals against that decision. The main issue in the appeal relates to the interpretation of the Letter Agreement. Pinpoint says that Cigna is required to continue paying Pinpoint the amounts set out in the Letter Agreement relating to the subsisting CardSecure policies, even after the termination of the loyalty programme. Cigna's position is that it does not. A subsidiary argument by Pinpoint is that Cigna owes it fiduciary obligations which have been breached. Cigna also put forward a number of affirmative defences, including frustration. [6] Before dealing with these issues, we set out the factual background in more detail. The description of the background that follows is largely taken from Pinpoint's submissions and Clifford J's judgment.BackgroundThe QTAV Programme[7] The loyalty programme referred to above was established in October 1998 by Qantas, Telstra, ANZ and Pinpoint. It was called the "QTAV Programme" and was based on Visa credit cards issued by ANZ in its own name and co-branded in the names of Qantas and Telstra. Cardholders earned points on purchases made with the use of their cards, which could be redeemed on various goods and services including Qantas frequent flyer points. Pinpoint was the manager of the QTAV programme. Each Programme Partner was, aside from other benefits, entitled to market specified products or services to cardholders on an exclusive basis. Pinpoint was (among other things) entitled to market insurance (excluding travel insurance).Pinpoint and Cigna's relationship[8] Pinpoint was not, and is not, an insurance provider. Accordingly, it selected Cigna as the provider of insurance products immediately after the QTAV Programme was formed. The terms of the arrangement between them was set out in the Letter Agreement. As ultimately agreed and recorded in that agreement, the remuneration payable to Pinpoint with regard to insurance was divided into twocategories: 20 percent of all premiums payable to Cigna and a 40 percent profit share payment calculated by reference to the premium revenue received by Cigna less certain expenses noted in the Letter Agreement. The evidence of the Pinpoint witnesses was that, given the high upfront costs associated with launching a new insurance product (particularly marketing costs) and initially low revenues, no profit on the insurance book would be expected for between two to three years. [9] The Letter Agreement set out the manner of calculation of the profit share. It is uncertain if the percentages in the letter are estimates or assumed actuals. Pinpoint says that it was a mixture of two. Whatever the position, the following table shows that it was likely anticipated that the profit share would amount to under eleven percent of the premium. (We have left out the first year Solicitation Costs, and the small percentage owing to ANZ Life, in the calculations below and taken an assumed premium of $100.) Assumed premium 100.00 Percentage of billings to Pinpoint (20.00) Claims estimate (35.00) Reserve (10 percent of claims) (3.50) Administration (15.00) Profit 26.50 40% of Profit 10.60 [10] Cigna also, as part of the arrangements with Pinpoint, agreed to provide bonus points to QTAV cardholders who purchased insurance products from it. Accordingly, on 14 October 1998, Cigna entered into a Points Provider Agreement with Pinpoint to become one of the "Points Providers" under the QTAV programme. The Points Provider Agreement provided for a normal amount to be paid into a redemption fund to pay for rewards. The Letter Agreement provided for a payment of five percent of all billings to fund the rewards programme.CardSecure product[11] A number of insurance products were promoted to QTAV cardholders. Only one achieved real success: the revolving credit card insurance product titledCardSecure. Under the CardSecure policy, Cigna would assist policy holders to repay the balance owing on their QTAV cards on the occurrence of certain events, such as temporary disablement, redundancy or bankruptcy (if self-employed). [12] As noted in the Letter Agreement, ANZ Life Assurance Company Limited (ANZ Life) co-underwrote two additional benefits under CardSecure policies related to accidental death and permanent disablement, in return for receiving $0.0525 of premium which Cigna remitted monthly to ANZ Life. ANZ Life and Cigna entered into an underwriting agreement which set out the responsibilities of each party regarding sharing of revenue, administration of claims and the liabilities of each party. [13] As an additional incentive to cardholders, for each dollar incurred by a cardholder on CardSecure premium, five bonus reward points would be allocated to the cardholder (reduced to three points during the course of the QTAV Programme). The cost of these bonus points was invoiced to Cigna by Pinpoint in its role as manager of the QTAV Programme (as provided for in the Letter Agreement). [14] Operationally, the CardSecure premium calculation and billing process involved several stages and parties. Once a QTAV cardholder signed up to a CardSecure policy, this information would be passed to ANZ who would then load a "flag" on that cardholder's account. At the end of each month, ANZ would run a software programme, calculating the appropriate CardSecure premium for all cardholders with the "flag" (the rate being $0.78 per $100 of the outstanding monthly balance on the credit card). That premium would then be loaded onto the cardholder's credit card balance. In order to calculate the number of bonus points Cigna was required to pay, Pinpoint then used a software scanning programme to identify expenditure that would entitle a cardholder to bonus points and would then charge the cost of those points to the relevant bonus point providers. [15] According to Pinpoint, it and Cigna closely collaborated to maximise the success of the CardSecure book, including:(a) jointly working on marketing materials that were sent to QTAV cardholders regarding CardSecure and other insurance products; (b) discussing strategies regarding increasing the number of QTAV cardholders who purchased insurance products from Cigna; (c) keeping Cigna informed of relevant developments at the Programme Partner level; and (d) advocating, at the Programme Partner level, in support of the marketing campaigns that Cigna wished to undertake. [16] By February 2004, when the QTAV Programme ended, a large number of QTAV cardholders (over 9,000) had a CardSecure policy with Cigna.Termination of QTAV programme[17] On 30 September 2002, Qantas gave notice terminating the QTAV Programme as it was entitled to do under a no fault or convenience provision in the relevant agreement. This termination ultimately took effect from 20 February 2004 pursuant to the QTAV Termination Agreement dated 7 November 2003. A new loyalty programme and new card, the Qantas ANZ Visa (QAV) card, was launched in its place, commencing on 21 February 2004. Telstra and Pinpoint were not part of the new arrangements. From the point of view of cardholders, their credit card balances under the QTAV scheme were transferred to new cards.Dealings with ANZ[18] In a letter dated 10 November 2003, ANZ wrote to Pinpoint and threatened to cease processing CardSecure transactions. Once Pinpoint received this letter in early 2004, it replied to ANZ on 3 February 2004 reserving its rights against ANZ should ANZ take this threatened action and setting out various reasons why the ANZ was not entitled to refuse to collect the premiums. No reply was received from ANZ andPinpoint says that it assumed ANZ had withdrawn its threat and would continue to service the CardSecure policies. [19] Unbeknown to Pinpoint, ANZ had also written to similar effect to Cigna. As a result, and without involving Pinpoint, Cigna and ANZ struck an agreement for ANZ to continue to process CardSecure transactions. In return, Cigna agreed to pay a 30 percent commission to ANZ (rising to 35 percent once the co-underwriting arrangements with ANZ Life were terminated) in exchange for ANZ continuing to service the CardSecure policies. These processing arrangements were terminable on one month's notice by ANZ.Interpretation of the Letter AgreementIssues[20] The issues, as identified by the parties, are as follows: (a) Under the Letter Agreement, was Cigna required to make ongoing payments to Pinpoint after the QTAV Programme terminated in relation to insurance policies written by Cigna prior to the QTAV Programme ending? (b) Specifically, does the phrase in the Letter Agreement "the Qantas Telstra ANZ Visa Insurance programme" refer to: (i) The range of insurance products to be offered to QTAV cardholders under the QTAV Programme which, following the termination of the QTAV Programme, can no longer be so offered? (Cigna's position) (ii) The various insurance policies issued by Cigna under the auspices of the QTAV Programme, some of which are still in force? (Pinpoint's position)Evaluation[21] The parties are agreed that the correct approach to interpretation is that set out by Lord Hoffman in Investors Compensation Scheme Ltd v West Bromwich Building Society [1998] 1 WLR 896 at 912 – 913. Under that approach, interpretation is the ascertainment of the meaning which the document would convey to a reasonable person having all the background knowledge which would reasonably have been available to the parties in the situation in which they were at the time of the contract. [22] The Letter Agreement states in the first paragraph that it relates to the "Qantas Telstra Credit Card Insurance programme in New Zealand". As noted above, the parties differ on their interpretation of that phrase. Cigna supports Clifford J's view that the phrase is most naturally understood as referring to the series of arrangements pursuant to which insurance products would be offered to QTAV cardholders in New Zealand as part of the overall QTAV programme. By contrast, the position of Pinpoint is that this refers to the CardSecure credit card insurance policies generated under the auspices of the QTAV Programme. [23] We agree that the proper interpretation of the phrase is that it refers to the insurance part of the QTAV programme and not the policies themselves. If the phrase had been intended to refer to the policies only (and in particular be limited to the CardSecure programme) then it would, in our view, have said so. In a sense, however, this may beg the question. The issue is whether payment is still due to Pinpoint under the Letter Agreement with regard to the CardSecure policies, which had their origin in the QTAV programme and which continued after it had terminated. Restated, the issue is whether these policies can still be seen as being part of the QTAV insurance programme because they had their genesis in that scheme. [24] One major obstacle in characterising the insurance policies as still being QTAV policies is that, under the terms of the insurance agreements, it seems arguable that the CardSecure insurance arrangements automatically came to an end when the QTAV credit card was withdrawn by ANZ and replaced by a QAV creditcard: see above at [17]. The CardSecure policy terms provided that the policy would cease if "[y]our Qantas Telstra ANZ Visacard account is closed by you or ANZ, for any reason". [25] There is no doubt that, because of the arrangements with the ANZ, the policy premiums continued to be collected and provided to Cigna. The customers therefore would presumably have assumed that the policies were continuing and Cigna also obviously took that view in its negotiations with the ANZ. The strictly correct legal view, however, may be that a new policy was in fact entered into on the same terms in relation to the new QAV credit cards or that Cigna would be estopped from asserting that it had not. Even though from the cardholder's perspective little changed, it is difficult, in interpreting the Letter Agreement, to ignore the legal reality that the QTAV arrangements (including the insurance arrangements) had in fact terminated and new QAV arrangements had replaced them. These new arrangements included what must be regarded legally as replacement CardSecure arrangements. There is nothing in the Letter Agreement that relates to new insurance arrangements. It is relevant in this context to note that it was the actions of the ANZ in cancelling the credit cards (as a consequence of the termination of the QTAV Programme) that led to the termination of the policies and not any action of Cigna. [26] Another way of analysing the matter is to consider the payment structure. Under the Letter Agreement, Pinpoint was entitled to 20 percent of all billings under the programme as "an equitable remuneration for the services Pinpoint [was] to provide". It is then provided that the remuneration of 20 percent of billings was to be shared with ANZ. In addition to this, Cigna was to contribute five percent of billings as a bonus points contribution for the purpose of funding the rewards points in accordance with the Points Provider Agreement. Pinpoint was also entitled to a profit share with respect to the proportion of the profit generated from the "total temporary disablement and involuntary unemployment" portion of the net written premium generated. This was subject to the proviso that Cigna remained the main insurer of the programme.[27] Once the QTAV Programme was terminated, it is common ground between the parties that the five percent of billings related to rewards points falls away. Pinpoint's submission is that the other payments do not. [28] In relation to the payment of 20 percent of all billings, this is specifically tied to the services Pinpoint are to provide. It is common ground that the services to be provided included exclusive access to the QTAV customers, as well as some marketing input. It is true, as Pinpoint points out, that many of Pinpoint's services were effectively upfront services, such as the provision of initial access to the QTAV customers on an exclusive basis and the initial marketing assistance. Pinpoint also pointed to evidence that the CardSecure insurance book was regarded by Cigna as being mature at the time the QTAV programme was terminated and that there were no plans for any particular marketing drives to increase the coverage. However, we are engaged in interpreting the Letter Agreement as at the time it was entered into. [29] There is nothing in either the Letter Agreement or the surrounding circumstances at that time to suggest that the services to be provided by Pinpoint were seen as time limited, or that the ongoing remuneration was tied back only to the initial exclusive provision of access to the database. It is also clear, from the fact that another insurance company has been prepared to take on the provision of new credit card insurance products under the QAV scheme while Cigna still continues with the old QTAV policies, that the market is not in fact mature and that there remains room for a new entrant to acquire new customers. Further, the Letter Agreement cannot have an ambulatory meaning such that the meaning differs depending on whether it is interpreted before the insurance book is mature or after. [30] All the above points are strongly indicative of the payment obligation falling away when the QTAV programme was terminated and Pinpoint could no longer provide the services (including exclusive access to the QTAV customers) that it had contracted to provide. It would, of course, have been possible to provide in the Letter Agreement that the payment obligations with regard to the 20 percent of billings continued until the relevant policies were terminated but this was not done.[31] There is another reason why the 20 percent of billings obligation falls away. It is clear from the reference to the sharing of the 20 percent billings with the ANZ and the surrounding circumstances, that another service to be provided by Pinpoint was to ensure that ANZ processed the premium payments. Cigna submits, and we accept, that it was vital for the operation of the CardSecure insurance policies that ANZ collect the premiums (see also Pinpoint's comment set out at [48]). The insurance customers were customers of ANZ, it was ANZ that had knowledge of those customers and their credit card balances and, in a practical sense, Cigna could not have collected the premiums without the involvement of ANZ. [32] It was Pinpoint and not Cigna that had the contractual relationship with ANZ under the QTAV arrangements and it was Pinpoint that was the Programme Partner. The obvious intent was that it would be Pinpoint which would negotiate the arrangements with ANZ for the collection of premiums and that it would share the remuneration of 20 percent of billings with ANZ to the extent necessary to ensure that that service was provided by ANZ. Therefore the 20 percent of billings was directly tied, at least in some measure, to the services to be provided by ANZ and the obligation of Pinpoint to arrange those services. The fact that a remuneration sharing agreement was not entered into with ANZ does not lessen Pinpoint's obligation. We accept Cigna's submission that Pinpoint failed to ensure that ANZ kept processing the premium payments. [33] Pinpoint has criticised Cigna for negotiating directly with ANZ for the premium collection. However we consider that Cigna was entitled to assume, upon the receipt of the letter from ANZ, that Pinpoint had breached its agreement to ensure that ANZ continued the processing services. As noted above, at [18], Pinpoint had written to the ANZ setting out arguments why ANZ should continue with the processing arrangements. It says that, when it received no reply, it assumed that ANZ had accepted its arguments and would continue processing. Against the background (known to Pinpoint) that ANZ was not happy with Cigna's involvement in insurance arrangements, we do not consider that Pinpoint was entitled to make this assumption. It must, in any event, have known that its arguments why ANZ was required to continue processing were, at best, very weak and thus very unlikely to have been accepted by ANZ. We also accept Cigna's submission that the matter ofcontinued processing could, and arguably should, have been dealt with by Pinpoint in the November 2003 termination deed with regard to the QTAV scheme. [34] While it is true that Cigna has had the benefit of Pinpoint's services with regard to the current insurance policies and there may be an element of perceived unfairness in Cigna not providing some ongoing remuneration with regard to those policies, this is offset by the fact that, in order to keep the policies on foot, Cigna is required to pay commission of 30 percent on those policies (ie equal to the 20 percent commission plus the bulk of the projected profit share) to ANZ. In any event, contractual interpretation is not about fairness, but rather about what the parties agreed at the time of entering into the agreement. In this case the Letter Agreement tied the payment of 20 percent of billings to ongoing services which were not provided (and in some cases were not able to be provided) by Pinpoint after the termination of the QTAV programme. [35] With regard to the payment of the profit share, we accept Pinpoint's submission that this payment was aligned to the CardSecure policies, given the references to total temporary disablement and involuntary unemployment, although there seems no such limitation in respect of the 20 percent of billings. However, the profit share is only payable so long as Cigna remained the main insurer of the programme. It was submitted on behalf of Cigna that it is no longer the main insurer of the programme. We accept that submission. Cigna cannot be the main insurer of a programme that has ceased to exist. [36] The QTAV programme was brought to an end by Qantas and this automatically brought the subset of that programme, the insurance programme, to an end. We also accept Cigna's submission that Cigna had lost its position as the "main insurer of the programme" when, after the termination of the QTAV programme, it lost its contractual right under the Letter Agreement to sell insurance products to QTAV cardholders . [37] For all of the above reasons, we consider Clifford J was right to hold that Cigna's payment obligations to Pinpoint under the Letter Agreement ceased when the QTAV programme was terminated.Fiduciary obligationsIssue[38] The next issue is whether a fiduciary relationship existed between Cigna and Pinpoint in relation to arrangements contained in the Letter Agreement. The parties identified the following issues if the answer is in the affirmative: (a) Did Cigna breach fiduciary duties owed to Pinpoint? In particular, did it fail to continue to remunerate Pinpoint, and fail to keep proper accounts relating to the Card Secure insurance book: and (b) Did Pinpoint breach any fiduciary duties owed to Cigna by entering into the Termination Agreement regarding the QTAV Programme or failing to protect Cigna's interests? If so, are these breaches relevant to Pinpoint's claim? [39] Pinpoint's position is that Cigna owed it a fiduciary duty to account for the remuneration under the Letter Agreement. Cigna submits that the fiduciary duties pleaded by Pinpoint are in conflict with the terms of the arrangements between the parties, including the terms of the Letter Agreement.Evaluation[40] We accept Cigna's submission that the parties turned their minds to the question of whether they would have a fiduciary relationship and expressly elected not to have such a relationship by making that explicit in the Points Provider Agreement. Clause provided 15.5 provided that:The Points Provider [Cigna] and Pinpoint agree that nothing in this agreement: (a) makes either of them a partner, agent or representative of the other; or (b) creates any trust of fiduciary relationship between them.[41] We do not accept Pinpoint's submission that the relationship between the parties can be segmented and that the Points Provider Agreement statement only applies with regard to the rewards system. The arrangements between the parties have to be seen in their totality. [42] We also accept Cigna's submission that the fiduciary duty, that is owed by one party to a joint venture to the other party, as recognised by the Supreme Court inChirnside v Fay [2007] 1 NZLR 433, is inconsistent with the terms of the Letter Agreement. The Letter Agreement does not evidence a joint venture between the parties. The profit to be shared under the agreement was to be calculated in a formulaic way and cannot be seen to amount to a true profit-sharing agreement. By contrast, in Chirnside the parties entered into a joint venture and had a prior history as joint venturers. [43] Further, we accept the submission that no relationship of mutual trust and confidence existed between the parties and that Pinpoint demonstrated this by entering into the Termination Agreement without consulting Cigna or preserving its interests. We also agree that Pinpoint lacked any element of vulnerability in its dealings with Cigna and that, if anything, Cigna was vulnerable, reliant as it was on Pinpoint's relationship with the other Programme Partners and, in particular, ANZ. [44] In addition, even if there had been a fiduciary relationship, we do not consider there has been any breach by Cigna. As we have already found, under the Letter Agreement Cigna was only required to remunerate Pinpoint for the services it provided (most of which could no longer be provided after the termination of the QTAV programme) and as long as it remained the main insurer of the programme. The continuance of the QTAV programme, and Cigna's role as the main insurer, were not matters within Cigna's control. [45] We also consider that there is force in Cigna's submission that Pinpoint should be denied equitable relief in any event. Pinpoint arguably would not have clean hands because it failed to come to an arrangement to share the 20 percent of billings with the ANZ and failed to protect Cigna's position on the termination of the QTAV programme.[46] For the above reasons, we reject this ground of appeal.Cigna's affirmative defences[47] Cigna submits that the following terms should be implied into the Letter Agreement: (a) a term that entitled Cigna to cancel the Letter Agreement if the QTAV Programme was terminated; and/or (b) a term that entitled Cigna to terminate the Letter Agreement if ANZ refused to support the credit card insurance products offered to cardholders by Cigna. [48] In the alternative, it submits that the Letter Agreement was frustrated when the QTAV Programme came to an end. In its submission, the termination of the QTAV Programme and the refusal of ANZ to service the CardSecure policies clearly were "irresistible and extraneous events" which made the Letter Agreement impossible for Cigna to perform. In Cigna's submission this is evidenced by Pinpoint's own letter to ANZ dated 3 February 2004 which states:It appears to us that if ANZ acts in accordance with its stated intention it will be impossible for Cigna to perform obligations which it owes to us, including in respect of commission payable on CardSecure policies .[49] As we have already found in favour of Cigna on the interpretation of the Letter Agreement, we do not need to imply any terms into that agreement. Neither do we need to deal with the argument about frustration.Result and costs[50] The appeal is dismissed.[51] The appellant must pay to the respondent costs for a standard appeal on a band A basis and usual disbursements. We certify for second counsel.Solicitors: Russell McVeagh, Wellington for Appellant Kensington Swan, Wellington for RespondentAPPENDIX Letter AgreementDear David [Ojerholm: General Manager, Pinpoint]Re: Confirmation of Arrangement between Pinpoint (NZ) Pty Ltd & CIGNA Life Insurance NZ LtdI am writing to provide a written confirmation of the arrangement between CIGNA Life Insurance NZ Ltd and Pinpoint (NZ) Pty Ltd in relation to the Qantas Telstra Credit Card Insurance program in New Zealand. CIGNA Life Insurance NZ Ltd is prepared to remunerate Pinpoint (NZ) Pty Ltd at the rate of 20% of all billings under this program as an equitable remuneration for the services Pinpoint are to provide with the intent that Pinpoint's fees are directly proportionate to the success of the program. The remuneration of 20% of billings is to be shared with ANZ. CIGNA Life NZ Ltd will also pay a profit share to Pinpoint (NZ) Pty Ltd in respect to the proportion of the profit generated from the 'Total Temporary Disablement and Involuntary Unemployment' portion of the net written premium generated. A 40% profit share payment will be remitted to Pinpoint following twelve months of the program operation. This will revert to a six monthly basis in any subsequent years provided CIGNA Life NZ Ltd remains the main Insurer of the program. ANZ Life NZ would be responsible for any profit share payable on the Death and PTD portion of NWP generated. CIGNA Life Insurance NZ Ltd's profit share calculation would omit the portion of ANZ Life premium, commission and solicitation spend contribution, together with Death and PTD claims. In addition CIGNA Life NZ Ltd will contribute an additional amount in respect of funding the Rewards Points agreed at 5 Reward Points per dollar of spend equivalent to 5% of billings. The product is to be jointly underwritten by ANZ Life NZ and CIGNA Life Insurance NZ Ltd and the components of the product will be split as follows:• ANZ Life NZ – Death & PTD• CIGNA – TTD & Involuntary UnemploymentWe are pleased to confirm the terms of the arrangement as follows:• Service fee 20% of Net Written Premium• Bonus Points Contribution 5% of Net Written Premium This is based on the following factors: Average annual premium NZ $140 Penetration Rate 21.4% of total card base Solicitation Year 1 10.9% of NWP Profit share – based on CIGNA portion of premium 40% IBNR 10% of claims Loss ratio – estimated 35% of NWP Administration – in respect of profit share 15% of NWP David, I trust that the above arrangement meets with Pinpoint (NZ) Pty Ltd's approval. I will put together a draft agreement between ANZ Life, Pinpoint (NZ) Pty Ltd and CIGNA Life Insurance NZ Ltd, for each party's consideration shortly. If you have any queries please don't hesitate to contact me directly on 0011 64 9 373 1017. I look forward to developing a successful and profitable business partnership for both our companies. Yours sincerely [Signed] Andrew Pennington Marketing Manager [Cigna]