PRODUCER AGREEMENT
1. Parties to this Agreement are
(hereinafter
sometimes referred to as “Producer”) and Acacia Insurance Managers, LLC
(hereinafter sometimes referred to as “Company”)
2. The effective date of this
Agreement is
3. Purpose of Agreement: The purpose of this Agreement is
to state the exclusive terms and conditions under which Producer shall act as
an independent broker in the solicitation and servicing of contracts of
insurance, including binders, policies, amendments and endorsements, and
applications, (altogether referred to in this Agreement as “Policy” or
“Policies”).
4.
Authority
of Producer:
(a)
Company
shall be the sole judge of the acceptance or rejection of any risk and shall
incur no liability for failure to place any risk.
(b)
Producer
has no power hereunder to bind insurance risks, but only to submit applications
for such risks to the Company. No coverage shall be in effect on any such
application unless and until accepted by Company in writing.
(c)
Producer
shall have full power to:
(1)
Submit
applications for insurance covering only such classes of risks and in such
amounts as Company may so authorize Producer to write; and
(2)
Collect
premiums from insureds or applicants for insurance submitted by Producer for
Company. Producer shall hold said premiums in trust for Company until remitted
to Company and shall be considered Company’s fiduciary.
Producer
shall promptly forward to the Company all pertinent information pertaining to
any application or policy in force, as well as all evidence of intent to insure
or to modify existing policies, as directed by the Company. Producer shall
retain originals of any information regarding any application or policy in
force not provided to the Company for the full duration required by law but not
less than five (5) years and will make such originals available to the Company
following twenty-four hours advance notice. Producer's duties under this
Section shall survive termination of this Agreement.
(d)
Producer
shall have no authority to extend the time for payment of premium, or to
change, alter, vary or waive any of the terms,
requirements, or conditions contained in any application, policy or guideline
as provided by the Company.
(e)
Unless
authorized in writing by Company to deduct commissions, Producer shall be
liable to Company for all gross premiums and fees due upon Policies, whether
new, renewal or endorsement, issued by Company in connection with risks
submitted by Producer.
(f)
Producer
has no authority to enter into any agreement with a premium finance company, to
enter into any premium finance agreement or to receive notices of premium
financing or the proceeds of premium financing for Policies issued or to be
issued by Company unless such authority is first extended to Producer by
Company in writing.
5.
Premiums and Commissions:
(a)
It
is expressly agreed and understood that all premiums collected by Producer are
trust funds and property of the Company and that Producer is acting as
fiduciary under this Agreement. Such funds shall not be used by Producer for any
personal or business purpose whatsoever but shall be held until remitted or
disbursed in accordance with the terms of the Agreement. The keeping of an
account by Company on its books as a creditor and debtor account or as a
declaration of account is understood to be memo of business transacted and
shall not be held to waive assertion of fiduciary relationship as to premiums
collected by Producer.
(b)
If
a return premium becomes due under any Policy, Company will promptly refund to
the insured such return premium. Producer shall be responsible for payment of
unearned commission to the Company. Producer shall repay the Company
commissions on return premiums at the same rate at which commissions were
originally paid to Producer (or retained by Producer if so authorized).
(c)
Company
shall have the right to offset any amounts due Producer by Company against
amounts due Company by Producer.
(d)
All
special fees, policy fees or charges or expense constants charged in addition
to premium on Policies are to be regarded as fully earned at the time of the
inception of the Policy. The obligation of Producer to pay such amount shall be
the same as if they were premiums, except that no commission will be allowed
upon such amounts.
(e)
Producer’s
commission under this Agreement shall be calculated in accordance with the
Producer’s Addendum 1 attached to the Agreement or the subsequent Producer’s
Addendum 1 in effect at the time the Policy is effective and shall be the sole
compensation of Producer for services under this Agreement. Company shall have
the right to change the amount and terms of the commission to be paid upon
thirty (30) days’ prior written notice to Producer.
(f)
Commissions
will be calculated pursuant to Paragraph 5(e) above and Company shall have the
right to offset any amounts due it. Payment will be made to Producer via
Electronic Funds Transmission (EFT) no later than fifteen (15) days after the
end of the month in which the applicable premiums were written. The EFT deposit
will be posted to the account shown in the EFT Instruction Agreement in the
Company’s possession as of the end of the previous month. It is the sole
responsibility of the Producer to ensure that the information on the EFT
Instruction Agreement is correct and valid at all times.
A statement showing the relevant calculations will be made available to the
Producer no later than the time of the EFT deposit. Any balance due to the
Company on such statement of commissions shall be paid by the Producer no later
than the 20th day of the month the statement was received. If the Producer
fails to make such payment by the 20th day, Producer agrees that Company may
withdraw the amount due from the account specified in the applicable EFT
Instruction Agreement. Producer agrees that Producer is solely liable for any fees
incurred as a result of the failure to maintain
sufficient funds in the account. (The account listed in the EFT Instruction
Agreement is the account for Producer’s commission deposit, NOT the Producer’s
trust account.)
6.
Expirations
& Renewals:
(a)
Producer
and Company expressly recognize Producer’s independent ownership of the policy
expirations covered by this Agreement and Producer shall retain ownership of
these expirations during and after the termination of this Agreement except as
specified herein. Producer hereby assigns to Company as security for its
obligation to pay the Company, but not in payment, all sums due or to become
due to Producer from the insured or insureds for whom such agency billed
Policies were produced by Producer for Company and with full authority in
Company to demand and collect these sums. On agency billed premiums so
collected by Company, Producer shall be entitled to no commission.
(b)
To
further secure the payment, when due, of any and all
sums which may become due Company hereunder, Producer grants to Company a
security interest in all the records of expirations of Policies produced
through Company, including the ownership, exclusive use of same, and to have
the rights of the holder of a security interest granted by law.
(c)
Producer
agrees that this Agreement or any copy thereof may be filed as a financing
statement if Company so elects. Producer hereby agrees to sign a UCC-1 Form and
any other documents required to secure the Company’s interest in the
expirations and renewals.
7.
Change
in Operations or Producer:
Producer shall give Company sixty (60) days prior written notice of any of the
following changes to the operations of Producer’s agency:
(a)
If
Producer is an individual and enters into a
partnership or other business venture to act as an insurance agency with one
(1) or more persons.
(b)
If
Producer is an individual or partnership and incorporates Producer’s insurance
agency or forms some other entity; or
(c)
If
Producer is an individual or partnership or corporation and transfers, sells, merges,
or consolidates any part of Producer’s insurance agency or insurance business
with any other entity.
Producer’s
failure to give the required notices will terminate the Agreement on the
effective date of any of the above events at Company’s sole option. Producer
will forfeit all commissions, earned and unearned, on policies in force after
the effective date of such an event.
The
consent by Company to any such occurrence may be contingent upon a review of
the background and experience of any new owner, the acceptance of the terms of
this Agreement by any proposed new owners, the receipt of indemnity agreements
from any proposed new owner or any other requirement which Company may
reasonably impose prior to Company's determination that it will consent to, or
reject, the proposed new owners.
8.
Termination:
(a)
This
Agreement shall continue in force and effect until terminated by mutual
agreement of the parties or by one of the parties giving thirty (30) days
written notice of termination to the other. However, in the event of fraud or
breach of any of its conditions or provisions on the party of Producer, this
Agreement may be cancelled by the Company at any time thereafter, effective
immediately, by notice to Producer. In the event of cancellation on account of
fraud or breach of conditions, any indebtedness of Producer to Company and all
premiums in the hands of Producer or for the collection of which Producer is
responsible shall, notwithstanding any provisions herein to the contrary,
become immediately due the Company.
(b)
This
Agreement shall terminate automatically and without notice in the event of
cancellation, revocation, suspension, or forfeiture of any license required by
law for Producer’s performance in any respect under this agreement. The
maintenance of such license in good standing shall be at all
times the responsibility of Producer as an express condition to
continuation hereof and in the event of any cancellation, revocation,
suspension or forfeiture of such license, Producer shall immediately notify
Company of the complete details thereof, and Producer shall forfeit all
commissions, earned or unearned, on Policies in force as of such cancellation,
revocation, suspension or forfeiture of license.
(c)
This
Agreement shall terminate automatically and without notice in the event of:
(1)
Producer
being insolvent or bankrupt or filing for protection from creditors related to
bankruptcy or insolvency; or
(2)
Producer
or any of its officers, directors, or shareholders being convicted of any crime
in violation of 18 USC §§ 1033-1034.
(d)
In
the event of termination of this Agreement, Company shall timely notify each
insured under a Policy to prevent the extension of the Policy beyond its
expiration date.
(e)
The
obligations of Producer to indemnify and hold Company harmless on any claim
arising from failure of the Producer to comply with the terms of this Agreement
shall survive termination of this Agreement.
9.
Administrative
Provisions:
(a)
In
the event Company shall have to institute any lawsuit to enforce the
obligations assumed by Producer in this agreement or defend any lawsuit brought
against Company because of its having entered into this Agreement, Company is
entitled to recover from Producer all costs, expenses, judgments
and attorney’s fees incurred by Company in connection with any lawsuit.
(b)
The
obligations and undertaking of each of the parties of this Agreement shall be
performable in Collin County, Texas. Producer agrees to pay the Company, at its
home office in Collin County, all sums of money which may become payable to
Company under this Agreement. Enforcement and interpretation of this Agreement
and related agreements are to be determined using the laws of the State of
Arkansas.
(c)
Producer
shall immediately refer to Company all claims involving policies issued by
Company hereunder. Any available documentation shall be faxed to the Company
immediately.
Producer
has no authority to adjust or settle claims or to assign the adjustment of any
claim.
(d)
Company
shall not be responsible for any expenses incurred by Producer without
Company’s prior written approval.
(e)
Any
policy forms or other Company supplies furnished to Producer by Company shall
always remain the property of Company and all property of Company shall be
returned to it or its representative promptly upon demand.
(f)
Producer
shall keep true and complete records and accounts of all transactions with
policyholders and with Company. Such records shall be open at
all times to the inspection of duly authorized representative of the
Company. Producer's duties under this Section shall survive termination of this
Agreement.
(g)
Producer
shall not insert any advertisements concerning Company in any publications or
issue any circular or paper referring to Company without first obtaining
consent of the Company in writing.
(h)
Company
and Producer expressly agree that Producer shall be an independent contractor
of Company. This Agreement shall not be deemed to constitute the Producer as an
employee of Company.
(i)
Producer
agrees to notify the Company within twenty-four (24) hours of the receipt of
all complaints from insureds and/or the Texas Department of Insurance and to
immediately forward to the Company all notices of suits or suit papers that may
involve the Company.
(j)
Company
shall at all times have the right to cancel any Policy
pursuant to any applicable statutes and/or regulations; however, Producer shall
remain obligated to pay Company the earned premium thereon.
(k)
Producer
shall timely and completely comply with all laws, rules
and regulations, including all underwriting and other rules of the Company, in
the conduct of business under this Agreement. Producer shall not expose the
Company to any claim, litigation, administrative proceeding, fine or penalty by
failing to so comply.
(l)
In
the event Company receives an insufficient funds check from Producer, Company
may elect to initiate cancellation on all in-force agency bill business,
pursuant to any applicable statutes and regulations and deem insufficient funds
as a material breach of contract, which may result in the cancellation of said
Producer’s Agreement. Company, at its discretion, may elect to process any new
or renewal business applications from Producer and requests for endorsements of
Policies in force only if accompanied by a cashier's check, certified check or cash, for the gross premium due, until such time as
Producer pays in full the obligation covered by the insufficient funds check.
(m)
Producer
agrees to maintain errors and omissions insurance covering its operations, including
the obligations of this Agreement, in an amount not less than $500,000 per
claim and annual aggregate, with a deductible not to exceed $10,000. Producer
agrees to provide Company with an annual in- force copy of the errors and
omissions insurance policy together with all amendments, endorsements,
renewals, replacements, and cancellations of such policy during the term of
this Agreement.
(n)
Producer
agrees to maintain agency licenses as required to conduct business with Company
as required by the Arkansas Department of Insurance. Producer agrees to provide
Company with an annual in-force copy of the appropriate required licenses for
all Producer employees that will be selling Company products.
(o)
If
a conflict exists as to which duly appointed Producer is authorized to
represent an existing or prospective policyholder, a written statement signed
by the policyholder designating the Producer shall be binding upon the Producer
and may be relied upon by the Company to determine the servicing Producer. The
Company, in its sole discretion, shall determine which Producer is entitled to
receive commissions, and the Producer agrees to be bound by Company’s
determination.
(p)
Producer
agrees to submit all applications and requests for coverage changes
electronically via the Company’s web site and explicitly authorizes the Company
to communicate with Producer electronically via email or facsimile and agrees
to provide Company with updated email and facsimile information as needed.
Producer also agrees to accept Policies and agency billing in electronic format
when provided by the Company.
(q)
Producer
agrees to service all business for which Producer is designated as the Producer
of record, subject to the customary business standards of the insurance
industry, except as otherwise agreed upon in writing by Producer and Company.
10. Dispute Resolution: In the event of a dispute between
Producer and Company with respect to this binding Agreement, the parties
expressly agree that they shall submit any such dispute(s) to be resolved by
final and binding arbitration. Any award or remedy made may be confirmed in an
Arkansas Court having jurisdiction and shall not be subject to appeal. The
arbitration shall take place in Pulaski County, Arkansas, at a site selected by
Company unless otherwise agreed upon in writing by both parties. The parties
shall select an agreed arbitrator from that county. In the
event that a party submits a demand for arbitration to the other party
which is not responded to within fourteen (14) days, or is denied, the party
seeking arbitration shall have the unilateral right to select the arbitrator
and the selection shall be binding upon the party failing to respond or denying
arbitration. This Agreement shall be construed in accordance with the laws of
the State of Arkansas. The parties expressly covenant and agree that the duties
under this Article shall survive termination of this Agreement.
11. Notice: Any notice required or permitted
to be given under this Agreement shall be validly given or served in writing
and delivered personally or sent by first class mail or registered mail, return
receipt requested, postage prepaid, to the address on the signature page of
this agreement, or to such other address as either party may hereafter
designate in writing. Such notice shall be deemed delivered three (3) business
days after being deposited in the United States Mail with prepaid postage and
addressed as indicated in this Paragraph. The parties further covenant and
agree that notice shall be validly given or served if Company sends said notice
to Producer's business e-mail address Producer shall provide to Company and if
Producer sends said notice to the e-mail address of a management level
representative of Company.
12.
Miscellaneous:
(a)
The
rights, privileges, interests, powers or claims of
Producer arising under or growing out of this Agreement are not assignable (by
sale or otherwise) by Producer, and no assignee shall acquire any rights
thereto, without the prior, written consent of Company. The rights of any
assignee under any assignment to which prior consent has been or may be given
shall be subject to the lien given to Company in this Agreement.
(b)
No
waiver of any breach or violation of any provision of this Agreement by either
party shall be deemed made unless made in writing. Any such waiver shall not
operate or be construed as a waiver of any subsequent breach or violation of
this Agreement.
(c)
This
writing represents the entire Agreement and understanding of the parties with
respect to the subject matter hereof, it may not be altered or amended except
by a subsequent written Agreement duly executed by all parties.
(d)
This
Agreement, and its validity, performance, and effect shall be determined, and
its terms construed in accordance with, the laws of the State of Arkansas.
(e)
The
headings of the paragraphs in the Agreement are a convenience only and shall
not affect its interpretation.
(f)
This
Agreement shall be binding upon, and inure to the benefit of, the parties,
their respective heirs, representatives, successors
and assigns.
(g)
This
Agreement may be executed in two (2) or more counterparts, each of which shall
be deemed an original, and all of which taken together shall constitute one and
the same documents.
(h)
The
parties hereto, hereby agree to execute and deliver all such instruments, and
take all such action as may from time to time be necessary, in
order to fully effectuate the purposes of the Agreement.
(i)
Words
and phrases shall be read in context and construed according to the rules of
grammar and common usage. Words and phrases that have acquired a technical or particular meaning, whether by legislative definition or
otherwise, shall be construed accordingly. Words in the present tense include
the future tense. The singular includes the plural, and the plural includes the
singular. Words of one gender include the other gender.
(j)
The
rights, duties and obligations of the parties to this
Agreement, to such extent as they are not dealt with specifically or by
necessary implication in this Agreement, shall be in accordance with the
customs and usages prevailing in the insurance business in the State of Arkansas.
(k)
Producer
represents that Producer, Producer's officers, and directors have not been
convicted of any crime contemplated by 18 USC § 1033-1034,
and agrees to report same to Company immediately should the same occur.
(l)
Producer
represents that Producer, Producer's officers and
directors, as applicable are duly licensed and in good standing in all states
in which Producer, its officers and directors, as applicable are conducting
business and agrees to report any investigation of or action taken against same
(persons, entities, licenses, business) by a regulatory authority to Company
immediately upon discovery.
(m)
Producer's
ownership of affected expirations will transfer to Company under the following
circumstances:
(1)
Failure
by Producer to satisfy a debt owed to Company within thirty (30) days of
termination of this Agreement.
(2)
Failure
by Producer to properly account for, and pay, all premiums for which Producer
is liable upon thirty (30) days notice of a demand to
provide such payment or
(3)
"Abandonment"
of Producer's business. For purposes of this Agreement, "Abandonment"
shall mean documented evidence of a consistent disregard of the affected
business or premises of Producer.
(n)
This
Agreement shall take effect as of the date entered on the first page of this
Agreement.
(o)
Company
agrees that it shall maintain the privacy rights of the parties to the contract and all third parties whose privacy
rights could conceivably be affected. Company agrees that it shall comply with
all state and federal laws and regulations pertaining to privacy rights and
confidentiality.
13.
Requirements
Incidental to Electronic Processing:
Company shall give Producer access to electronic processing of applications and
for customer service, including any electronic signatures by an insured. The
parties expressly agree that Producer shall:
(a)
Follow
proper identification procedures to determine and prove the identity of the applicant.
(b)
Process
all policy transactions and issue all applications on the Company's website
with the effective date and time accurately reflecting the same date and time
that the policy was bound. Producer shall not attempt to explain any web pages
that confuse, or are unclear to, the applicant when presented, but shall stop
the application process and notify a Company manager.
(c)
Advise
the applicant that the application will utilize an electronic signature process
and the acceptance and use of such electronic signature must only be elected by
the applicant while in the Producer's office. Producer shall also advise the
applicant that the use of an electronic signature will not be denied legal
effect or enforceability solely because it is in electronic form. The applicant
may choose not to conduct transactions by electronic means.
(d)
Provide
the applicant with a copy of the completed application, digital signature
acceptance confirmation, declarations, endorsements, exclusions, receipt, and
ID cards prior to the applicant's departure from the Producer's office and
retain a copy of all documents delivered to applicant in Producer's files; and
(e)
Refrain
from making, altering, waiving, modifying, misrepresenting, or discharging any
of the terms or provisions set forth in a policy, endorsement, application, binder,
or Company's website.
