Indy Producer Contract

ewilkins

Super Genius
100+ Post Club
I am now in negotiations with an indy agency about signing on as a producer. This is my first time in speaking with an indy agency and I'm curious about the contract. I know this post is kind of long, but can you guys take a look at this and let me know if everything looks cool? I mean, some of it is a no-brainer, but does this look pretty standard?

A. The Producer Agrees:

1. To solicit only those classifications for which licensed.

2. To abide by all rules and regulations of the Company including particularly those with respect to:
a. Solicitation
b. Underwriting
c. Extensions of credit
d. Use of Company material, supplies and equipment
e. Office hours and other rules and customs of the Company
f. Attendance at Company meetings, etc.
g. Binding authority

3. To devote as much time to the sales & service of the Company Insurance business and to represent no other insurance Company.

4. To refer all applications of insurance secured to the Company for final approval as to acceptability.

5. To remit to the Company within 24 hours all monies collected in payment of premium on any policies written by the Company whether or not produced by the Producer. In the meantime all funds are held in a fiduciary capacity.

6. To attend, at the expense of the Company, all schools mutually benefiting the Company and Producer. To take advantage of any other forms
or types of training that the Company may prescribe for growth and development in the business of Insurance.

7. To refrain from soliciting any new, renewal or additional
business from the Company's present policyholders without the express permission of the Company.

8. To reimburse the Company for the deductible, currently $2,500.00, for any Errors and Omissions Claim that is deemed by the Agency's Errors and Omissions Carrier to be the Producer's error. The Company will be responsible for the Errors and Omissions not deemed in control of the Producer.


B. Company Agrees:

1. Producer will have the status of a commissioned agent, and will receive a 1099 at the end of the year.
a. Commissions will be paid at the following rate
First year commissions will be paid at 75% of total earned by Company on P.& C., 75% on Life & Health insurance.
b. Each renewal commission will be paid at 30% of income received by the company.
c. Commissions will be paid on the 5th and the 20th of the month.
2. To follow a predetermined schedule of training for the Producer and see that manuals, forms and instructions necessary to make this training effective and continuing are furnished.

3. To work personally with the Producer as means of providing on-the-job training so that the Producer will develop the proper knowledge and skill in the handling of the products of the Company. There will also be instruction in the skills of selling and underwriting.

4. To maintain records of all business produced by both Producer and Company in order that the commission of the Producer may be determined; make such records available to the Producer at all reasonable times.

5. To grant full power and authority to the Producer to:
a. Receive and transmit proposals for contracts of Property, Casualty, and Life and Health insurance coverage on such class of risks as the Company is authorized to write.
b. Collect, receive and receipt for premiums on insurance tendered by the Producer to and accepted by the Company.

C. It is mutually agreed that:

1. Both during the employment and following termination of this agreement, the Company will own all business produced by the Producer.

D. Terminations of this contract may be accomplished by:
1. 30 - Days written notice by Producer to Company
2. 30 - Days written notice by Company to Producer
3. Fraud, embezzlement or any other dishonest act of the Producer
4. Conviction of a felony
5. Death of the Producer
E. In case of Termination
1. Producer agrees that for a period of 2 years should the Producer directly or indirectly solicit, or accept customers of the Company, Producer agrees to pay Company 1.5 times annual commission of each customer at the time of rewrite. The Producer acknowledges that all manuals, lists and records of any kind including information pertaining to policyholders and expirations) are the confidential property of the Company and agrees they shall not be used or
divulged in any way detrimental to the Company and shall be returned to the Company upon termination of the Producer. Should legal fees be incurred to enforce this agreement, Producer agrees to reimburse all costs of Company
should Company prevail in the litigation and Company agrees to reimburse all costs of Producer should Producer prevail in the litigation.

4. The Producer will not be entitled to earnings of new policies sold but not yet paid for, nor will the Producer be charged back for renewal commissions paid but not yet earned.
 
Is there anything in the contract about vesting in commissions? The company is going to own your book of business, which may be fair if they are going to train you, but it's not fair if you spend years at the agency, build up a book of business, and not have any vesting in the renewal commissions, if the agency decides to terminate you.
 
3. To devote as much time to the sales & service of the Company Insurance business and to represent no other insurance Company.

That doesn't sound very "Indy" to me.
 
"3. To devote as much time to the sales & service of the Company Insurance business and to represent no other insurance Company."
*****************************************
To devote as much time as what? To devote as much time as necessary? To devote as much time as you devote to other interests?

This (#3) seems ambiguous at best.
 
Thanks for the replies. There were honestly a few things in this contract that just haven't felt right to me. Plus the agent (in my opinion) seemed to treat me as if he were really trying hard to sell me on the job. I don't know. It's hard to explain. Thanks everyone.
 
It sounded like a good place to learn, 75% is a good commission. P&C is the hardest insurance to break into. If they have competive rates, I would say go for it. I don't see anything scary in the contract, in fact it is agent friendly. The main thing is, I don't see a non compete clause, just a don't go after your old clients for 2 yrs, if you leave.
 

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