Document:

FORM OF AGENCY AGREEMENTS

 

Exhibit 10.2

AGENCY AGREEMENT

This Agreement is effective     
   /        /    
     , between         
                
                
                
                
           
(the “Agent”) having an address at:        
                
                
                
                
                
                
                
                
                
        
and THE PROFORMANCE INSURANCE COMPANY, Freehold New Jersey, 07728 (the
“Company”).

RECITALS

	A.	 	The Company is a New Jersey insurance company authorized to transact
property and casualty insurance in the State of New Jersey.
	 
	B.	 	The Agent is a New Jersey licensed insurance agent.
	 
	C.	 	The Agent wishes to become an independent contractor of the Company and
the Company wishes to secure the Agent’s services as an independent
contractor.

NOW, THEREFORE, in consideration of the mutual covenants herein contained the
parties hereby agree as follows:

	1.	 	AGENT’S AUTHORITY

	 	1.1	 	The Agent is an independent contractor who will exercise his own
judgment in the conduct of the business conducted pursuant to this
Agreement. The Agent is not an employee of the Company and is free to
represent such other companies as the Agent shall consider appropriate.
The Agent shall have exclusive control of his time and of the conduct of
his agency and shall be responsible for all expenses incurred in the
operation of his agency.
	 
	 	1.2	 	During the term of this Agreement, the Agent is authorized on behalf
of the Company to:

	 	(a)	 	Solicit,and submit applications for insurance;
	 
	 	(b)	 	Issue and deliver policies, certificates and endorsements as
authorized by the Company in manual rules and rates, underwriting
guides, bulletins or other written instructions;
	 
	 	(c)	 	Collect and receipt for premiums in compliance with Company
procedures;
	 
	 	(d)	 	Cancel policies at his discretion where cancellation is legally
permissible;
	 
	 	(e)	 	Bind coverage and execute insurance contracts in accordance
with the guidelines furnished from time to time by the Company or as
authorized by the Company with respect to specific risks.

	 	1.3	 	The Agent shall forward copies of all policies, certificates and
binders issued by the Agent or otherwise notify the Company in writing
of all liability accepted, not later than the seventh (7th) day
following the inception date of coverage.
	 
	 	1.4	 	The manuals and the policy, endorsement and binder forms furnished to
the Agent by the Company shall remain the property of the Company and
shall be accounted for or returned upon request.
	 
	 	1.5	 	All accounting records pertaining to the Agent’s business with the
Company shall be subject to inspection and audit at any time with or
without prior notice, by the Company’s representative.
	 
	 	1.6	 	The Agent shall not publish or distribute any advertisements,
circulars or other materials referring to the Company or containing the
Company’s name without first securing written approval from the Company.
	 
	 	1.7	 	The Agent shall not bind coverage nor issue, renew or deliver on the
Company’s behalf any policy covering a risk located in a state in which
the Agent is not a licensed resident agent, unless the Agent is
otherwise authorized to engage in the insurance business in such state.
	 
	 	1.8	 	This Agreement does not give the Agent the exclusive right to
represent the Company in any area.
	 
	 	1.9	 	The Company shall have authority to expand or restrict the Agent’s
authority effective immediately upon delivery of written notice to the
agent.

	2.	 	UNDERWRITING CONTROL OF THE COMPANY

The Company reserves the right to refuse to write any policy at any time or to
cancel any policy where legally permissible, subject to the provisions of
Section 4 of this Agreement.

 

 

	3.	 	INDEMNIFICATION OF AGENT

	 	3.1	 	The Company shall indemnify and hold the Agent harmless:

	 	(a)	 	Against any claims, liabilities or costs of defense which the
Agent may become obligated to pay as a result of loss to
policyholders caused directly by an error of the Company in the
processing of policies under this Agreement, except to the extent
that the Agent has caused, contributed to or compounded such error,
directly or indirectly; and
	 
	 	(b)	 	Against any and all civil liability for damages and expenses,
including the cost of defense, that the Agent may be obligated to pay
as a direct result of the failure of the Company to comply with the
requirements of the Fair Credit Reporting Act, Federal Truth In
Lending Law and Fair Credit Billing Act, except to the extent that
such failure to comply has been caused or contributed to by any
negligence, willful or intentional act or omission of the Agent.
	 
	 	(c)	 	Against liability, including cost of defense and settlements,
imposed on the Agent by law for damages sustained and caused by acts
or omissions of the Company in connection with the performance of
loss control counseling, inspections or similar related work for the
Agent’s clients or customers, provided the Agent has not caused or
contributed to such liability by his own acts, errors or omissions.

	 	3.2	 	The Company’s obligation to indemnify shall be conditioned upon
prompt notification by the Agent to the Company of any claim made or
legal action brought against the Agent which is subject to
indemnification as set forth above and the Company shall have the right
to direct the investigation, settlement and defense of any such claim or
action.

	4.	 	COMMISSIONS

	 	4.1	 	The Company shall pay commissions to the Agent in accordance with the
rates and conditions set forth in the current Commission Schedule
attached to this Agreement, as modified from time to time.
	 
	 	4.2	 	Commission rates may be revised by mutual agreement of the Agent and
the Company, or by the Company giving the Agent at least sixty (60) days
advance notice of the revisions and the effective date thereof.
	 
	 	4.3	 	Undistributed commissions in the hands of the Company at any time may
be applied to and constitute an offset against any monies due the
Company.
	 
	 	4.4	 	In the event that the Company shall either during the term of this
Agreement or after its termination, refund premiums under any policy by
reason of cancellation or otherwise, the Agent shall immediately return
to the Company the commission received on the premium refunded.
	 
	 	4.5	 	Nothing contained in this Section 4 shall prohibit the negotiation of
special commission rates on individual policies.

	5.	 	PREMIUM COLLECTION

	 	5.1	 	With respect to direct-billed policies:

	 	(a)	 	The Agent agrees to collect and remit to the Company, the
initial premium together with the completed application declaration
within the time period set forth in the established Company
procedure.
	 
	 	(b)	 	The Agent assumes responsibility for the payment of the initial
premium on policies issued by or through the agency whether or not
such premium is collected or collectible.
	 
	 	(c)	 	The Company shall bill all renewal or adjustment premiums
direct to the insured or to a designated lending institution or
servicing agency holding premiums in escrow or reserve. These
premiums are payable to the Company in gross.
	 
	 	(d)	 	Should any renewal, additional or endorsement premiums on
business written pursuant to the agreement come into the Agent’s
hands, the Agent will remit the premium in gross to the Company
within the time period set forth in the established Company
procedures.
	 
	 	(e)	 	The Company shall pay the Agent, as full compensation on
premiums remitted to or collected by the Company, commissions at the
rates and in the manner specified on the commission schedule attached
to this Agreement.

	 	5.2	 	With respect to agency billed policies, the Agent has the authority
and responsibility to collect, receive and receipt for premiums on
business written by the Agent and to retain out of the premiums
collected commissions at the rate indicated on the current commission
schedule attached to this Agreement. This provision does not apply to
business written on a direct-billed basis.
	 
	 	5.3	 	The Company shall render a premium accounting to the Agent. The
Agent shall pay to the Company, net premiums due on all agency-billed
insurance placed by or through the Agent with the Company not later than
forty-five (45) days after the close of the month in which the business
becomes affective, whether such premiums are collected or collectible.
If the Agent is unable to collect an additional premium developed by
adjustment or audit and provided there is no premium development on
other policies issued by the Company to the insured which may be used as
a set-off, the Agent may request the Company to undertake direct
collection of the premium and relieve the Agent of the responsibility
for the premium. However, the Agent must make this request to the
Company in writing within forty-five (45) days from the date

 

 

	 	 	 	the Agent receives written notification that the additional premium is
due. No commission will be paid to the Agent on any premium returned to
the Company for direct collection. It is agreed and understood that the
Agent’s failure to request such direct collection within said forty-five
(45) day period shall obligate the Agent to remit the premium regardless
of whether or not the Agent collects the premium from the insured.

	 	5.4	 	All premiums received by the Agent pursuant to the authority granted
by this Agreement shall be held by the Agent in a fiduciary capacity as
trustee for the Company. The privilege of deducting commissions from
premium monies received by the Agent shall not be construed as an
alteration of this fiduciary capacity.
	 
	 	5.5	 	If the Agent is delinquent in either accounting or payment of monies
due, the Company may by written notice to the Agent, immediately
terminate, suspend, or modify any provision of this Agreement. The
Company shall not take such action where only minor differences occur
between the Company’s and the Agent’s accounting records. Where major
differences occur between accounting systems, the Company, at its
discretion, shall not take such action without an opportunity for an
exchange of information with the Agent concerning such differences.
	 
	 	5.6	 	The Company shall clearly and prominently identify the Agent by name
when transmitting policies, endorsements, premium notices, cancellation
notices and other communications to policyholders. The Company shall
also provide the Agent with a copy of all such items sent to
policyholders.
	 
	 	5.7	 	In the event of termination of this Agreement by the Company,
provided the Agent is not in default, the Company will at the Agent’s
request, furnish a list of policyholders, with the expiration dates of
the policies, and will mail appropriate non-renewal notification to
policyholders, as required by law.

	6.	 	POLICY CANCELLATIONS

	 	6.1	 	The Company shall honor any request by the Agent for cancellation of
any insurance contract provided that such cancellation is not in
violation of statutory, regulatory, or policy provisions.

	7.	 	OWNERSHIP OF EXPIRATIONS

	 	7.1	 	In the event of termination of this Agreement, provided the Agent has
promptly accounted for and paid over premiums which are due the Company,
the Agent’s records and expirations shall remain the property of the
Agent and be left in his undisputed possession; otherwise the records
and expirations shall be vested in the Company.
	 
	 	7.2	 	Should there be a dispute over the extent of the Agent’s liability to
the Company, such dispute shall not prevent application of the above
ownership of expirations clause in favor of the Agent, provided the
Agent promptly furnishes collateral security acceptable to the Company
in the amount of the difference, to be held by the Company until the
difference is resolved.
	 
	 	7.3	 	In the event of termination of this Agreement, where the ownership of
expirations clause applies in favor of the Company, and the amount
realized by the Company from the records and expirations exceeds the
total obligations of the Agent to the Company plus the expenses of such
realization, such excess as determined by the Company will be promptly
paid to the Agent.
	 
	 	7.4	 	Except in the case of default by the Agent as set forth in Section
7.1 above, the Company shall not refer or communicate the expiration or
the Agent’s work product to any other agent or broker.

	8.	 	CONFIDENTIALITY

	 	8.1	 	While working with the Company, the Agent may acquire proprietary
information. “Proprietary Information” is understood to include the
Company’s manner of operation, business methods, premiums, products,
servicing techniques, customers, underwriting guidelines and other
information that is not clearly public knowledge.
	 
	 	8.2	 	The Agent hereby agrees:

	 	(a)	 	It will use Proprietary Information only in the performance of
its duties to the Company. It will not use Proprietary informauon at
any time (during or after the term of this Agreement) for its
personal benefit, for the benefit of any other person or firm, or in
any manner adverse to the Company’s interests.
	 
	 	(b)	 	Agent shall not disclose Proprietary Information at any time
(during or after the term of this Agreement) except to authorized
Company personnel, unless the Company consents in advance in writing.
	 
	 	(c)	 	Agent shall return all material relating to Proprietary
Information to the Company at the termination of this Agreement.

	9.	 	TERMINATION PROVISIONS

	 	9.1	 	This Agreement shall terminate:

	 	(a)	 	Automatically if any public authority cancels or declines to
renew the Agent’s license or Certificate of Authority.
	 
	 	(b)	 	Automatically on the effective date of sale, transfer or merger
of the Agent’s business provided, however, that the Company at its
discretion may offer an Agency Agreement to any successor who meets
the Company’s requirements for appointment.
	 
	 	(c)	 	Upon either party giving at least ninety (90) days advance
written notice to the other.
	 
	 	(d)	 	Immediately upon either party giving written notice to the
other in the event of abandonment, fraud, insolvency, or gross
negligence or willful misconduct on the part of

 

	 	 	 	such other party.

	 	9.2	 	Subject to requirements imposed by law, if this Agreement is
terminated as provided in Section 9.1(c) above:

	 	(a)	 	The Company shall not, except at the Agent’s request, refuse to
renew any policy during the twelve (12) month period immediately
following termination of this Agreement, or cancel any policy after
it has been in effect for sixty (60) days except:

	 	(i)	 	For non-payment of premium or non-reporting of the basis
for premium calculations; or
	 
	 	(ii)	 	When in the Company’s opinion, there is:

	 	(1)	 	An increase in hazard; or
	 
	 	(2)	 	The risk does not meet the Company’s normal
underwriting standards; or
	 
	 	(3)	 	A material fact was misrepresented or not disclosed
to the Company at the time of acceptance.

	 	 	 	On such renewals during the twelve (12) months following termination, the
Company shall pay commissions at the rate in effect at that time, in
conjunction with the provisions of Section 4 of this Agreement.

	 	(b)	 	All provisions of this Agreement shall remain in full force and
effect including Section 4 commissions, and the authority granted to
the Agent under Section 1.2, except (a.), and (e.), until all
in-force insurance contracts have expired and been terminated and
premiums collected.
	 
	 	(c)	 	The Agent is authorized to issue and countersign appropriate
endorsements on contracts of insurance in force excluding
endorsements on fidelity or surety bonds. The endorsements, however,
shall not increase or extend the Company’s liability or extend the
term of any insurance contract without the Company’s prior approval.
	 
	 	(d)	 	The Company shall continue to provide to the policyholders all
normal and appropriate services on all in-force insurance contracts
without interruption.

	10.	 	AGENT’S SUCCESSOR

This Agreement may be assigned only with the expressed, written consent of the
Company and only to the Agent’s successor or successors provided such successor
or successors meet the Company’s requirements for appointment.

	11.	 	CHANGES IN THIS AGREEMENT

	 	11.1	 	This Agreement may be supplemented, amended or revised only in
writing by mutual agreement of the Agent and the Company except as
provided in Sections 1.2(b), 1.9, and 4.2. Revisions of this Agreement,
including commission changes, are limited to three (3) times per
calendar year except where mutually agreed upon or mandated by
government authority.
	 
	 	11.2	 	Failure of the Company for any reason to insist upon compliance by
the Agent with the provisions of this Agreement or the rules and
regulations of the Company shall not be construed as or constitute a
waiver thereof.

	12.	 	GENERAL PROVISIONS

	 	12.1	 	Whenever under the provisions of this Agreement notice is required to
be given, it shall be in writing and shall be deemed given when mailed,
postage prepaid, by registered or certified mail, return receipt
requested, addressed to the Agent at his address as set forth herein, or
to such other address as may appear on the record books of the Company.
Notice to the Company shall be mailed, postage prepaid, by registered or
certified mail, return receipt requested, and addressed to the Company
at its principal business office.
	 
	 	12.2	 	The Company shall include all credits for salvage and subrogation
recoveries on agency premium and loss exhibits.
	 
	 	12.3	 	Should a conflict exist as to which producer is authorized to
represent an insured with respect to any insurance policy issued by the
Company, the insured’s most recent written statement designating as
accepted by the Company the insured’s Agent shall be controlling.
	 
	 	12.4	 	The Agent shall have no authority to admit liability on the part of
the Company in any manner except in accordance with specific claim
settlement authority extended to the Agent in writing.
	 
	 	12.5	 	The Agent agrees to comply with all laws affecting his operation and
to maintain his qualifications for licensing by appropriate authorities.
	 
	 	12.6	 	If any provision of this Agreement should be invalid under or in
conflict with the laws of any state, such laws shall control; but in all
other respects the remainder of this Agreement shall not be affected.
	 
	 	12.7	 	The following Schedules or Addenda have been issued simultaneously
with this Agreement and have become a part hereof:

	13.	 	BROKERED BUSINESS

Agent shall submit to Company only that business which Agent has directly
solicited and which is under Agent’s direct control. Agent shall not broker
business for another producer.

	14.	 	PRIOR AGREEMENTS

This Agreement replaces and supersedes all Agency Agreements, written or oral,
which may have existed between the Agent and the Company. It constitutes the
full agreement of the parties.

 

 

Executed this                                        day of                                                          .

	 	 	 	 	 
	 	 	THE PROFORMANCE INSURANCE COMPANY
	 
	 	 	 	 
	

	 	BY:	 	 
	

	 	 	 	
 
	 
	 	 	 	 
	 	 	AGENT:
	 
	 	 	 	 
	

	 	BY:FORM OF LIMITED AGENCY AGREEMENTS

 

Exhibit 10.3

The Proformance Insurance Company

LIMITED AGENCY AGREEMENT

     This Agreement is effective                    /                   /                                      , between
                                                                                                                  (the “Agent”) having an
address at:

       
                                                                                                                              
                                    and
THE PROFORMANCE INSURANCE COMPANY, Freehold New Jersey, 07728 (the “Company”).

RECITALS

The Company is a New Jersey insurance company authorized to transact property
and casualty insurance in the State of New Jersey.

The Agent is a New Jersey licensed insurance agent.

The Agent wishes to become an independent contractor of the Company and the
Company wishes to secure the Agent’s services as an independent contractor to
service existing contracts of insurance.

NOW, THEREFORE, in consideration of the mutual covenants herein contained the
parties hereby agree as follows:

IT IS AGREED THAT:

	1.	 	While this Limited Agency Agreement is in force, the Agency is authorized by
the Company

	 	a.	 	To service on behalf of the insured such policies of the
Company, which were previously produced by the Agent and are
authorized by the Company or by statute or regulation, provided
that such renewals or endorsements do not increase the company’s
liability or add to the hazard or the amount of risk assumed
therein, unless specifically authorized by a Company underwriter in
writing.

	2.	 	The Agent agrees

	 	a.	 	To remit to the Company all premiums received as follows:

	 	(I)	 	Premiums applying to Company-billed policies to be
remitted in gross (without deduction of commissions) promptly
upon receipt by the Agent.
	 
	 	 	 	The Company agrees to compute and remit the applicable
commissions to the Agent promptly following the close of each
month.

	 	b.	 	To refund ratably to the Company the unearned commissions or
canceled policies and on return premiums by endorsements or audits at
the same rate at which such commissions were allowed to the Agent
when the policy or current renewal certificate was issued.

 

 

	3.	 	The Agent shall have no power or authority to receive, accept or issue
any new or renewal insurance policies, for or on behalf of the Company,
except for those renewals required by statute or regulation of the State
of New Jersey.
	 
	4.	 	The Agent’s records and use and control of expirations shall remain the
Agent’s absolute property and be left in his undisputed possession;
provided, however, in the event of termination of this agreement, if the
Agency has not properly accounted for and paid all premiums for which he
is liable, the Agent’s records as respects business placed with the
Company shall become the property of the Company and the Company shall
have sole right to use and control such expirations to the extent of the
Agent’s total indebtedness to the Company, unless the Agent provides other
security acceptable to the Company. Honest difference of opinion over
balances owned shall not constitute failure to pay.
	 
	 	 	The Company, in the exercise of the right reserved to it above, may, at
its option, retain all commissions which are payable or which may become
payable under contracts of insurance represented by such expirations, or
renewals thereof, and apply same against the amount of the Agent’s
indebtedness to the Company or may sell, assign, transfer or otherwise
dispose of such expirations to any other agent or broker. If, in either
event, the Company does not realize sufficient return to satisfy the
Agent’s indebtedness to the Company in full, the Agent shall remain liable
for the unpaid balance. Amounts realized by the Company in excess of such
indebtedness, less expenses incurred by the Company in the handling or
other disposition of such expirations, shall be paid to the Agent.
	 
	5.	 	This Agreement shall terminate as follows:

	 	a)	 	At any time upon mutual agreement of the parties.
	 
	 	b)	 	Immediately upon the cancellation or expiration of the last
policy of the Company written through the account of the Agent, or
upon receipt by the Company from the Agent of all money due the
Company on such business, whichever occurs last.
	 
	 	c)	 	Automatically if any public authority cancels or declines
to renew the Agent’s license or Certificate of Authority.
	 
	 	d)	 	Automatically on the effective date of sale, transfer or
merger of the Agent’s business provided, however, that the Company
at its discretion may offer an Agency Agreement to any successor
who meets the Company’s requirements for appointment.
	 
	 	e)	 	Immediately upon either party giving written notice to the
other in the event of abandonment, fraud, insolvency, or gross
negligence or willful misconduct on the part of such other party.

	6.	 	The Company shall not be responsible for Agent’s expenses such as rent,
transportation, clerk hire or solicitor’s fees, postage, telegrams,
telephone, expressage, advertising, personal local license fees or any
other Agent’s expenses whatsoever.
	 
	7.	 	The Agent agrees not to undertake or initiate advertising of any nature
in connection with policies or business related to the Company without
written approval of the Company.

 

 

	8.	 	Any unused policy forms, application or endorsement forms and other
unused Company supplies furnished by the Company to the Agent shall always
remain the property of the Company, and shall be returned to the Company
upon demand.
	 
	9.	 	The operation, conduct and pursuits of the Agent, except as provided in
the terms and conditions of this Limited Agency Agreement, shall not be
controlled in any manner by the Company. Nothing contained herein shall be
construed to create the relation of employer and employee between the
Company and the Agent.
	 
	10.	 	The Company shall indemnify and hold the Agent harmless:

	 	(a)	 	Against any claims, liabilities or costs of
defense which the Agent may become obligated to pay as a
result of loss to policyholders caused directly by an error of
the Company in the processing of policies under this
Agreement, except to the extent that the Agent has caused,
contributed to or compounded such error, directly or
indirectly; and
	 
	 	(b)	 	Against any and all civil liability for damages and
expenses, including the cost of defense, that the Agent may be
obligated to pay as a direct result of the failure of the
Company to comply with the requirements of the Fair Credit
Reporting Act, Federal Truth In Lending Law and Fair Credit
Billing Act, except to the extent that such failure to comply
has been caused or contributed to by any negligence, willful or
intentional act or omission of the Agent.
	 
	 	(c)	 	Against liability, including cost of defense and
settlements, imposed on the Agent by law for damages sustained
and caused by acts or omissions of the Company in connection
with the performance of loss control counseling, inspections
or similar related work for the Agent’s clients or customers,
provided the Agent has not caused or contributed to such
liability by his own acts, errors or omissions.

10.2 The Company’s obligation to indemnify shall be conditioned upon prompt
notification by the Agent to the Company of any claim made or legal action
brought against the Agent which is subject to indemnification as set forth
above and the Company shall have the right to direct the investigation,
settlement and defense of any such claim or action.

10.3 The agent shall indemnify and hold the Company harmless against all civil
liability including attorney’s fees and cost of investigation and defense
incident thereto, arising as a direct result of claims against the Company
resulting from acts, errors, or omissions of the Agent where the Company’s
liability is predicated solely upon the doctrine of respondent superior.

Executed this            day of            .

	 	 	 	 	 
	 	 	THE PROFORMANCE INSURANCE COMPANY
	 
	 	 	 	 
	

	 	BY:	 	 
	

	 	 	 	
 
	 
	 	 	 	 
	 	 	AGENT:

 

 

	 	 	 	 	 
	

	 	BY:

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