Company engages in the general business of insurance and all activities related thereto. Company has a business relationship with various insurance carriers and has the ability to place insurance coverage with such carriers conditioned upon the insured or proposed insured meeting the underwriting criteria of such carriers.
Producer is engaged in the business of selling insurance and desires to access Company to place insurance with carriers represented by Company.
NOW, THEREFORE, the parties agree as follows:
1. Authority and Responsibility.
(a) Producer shall act in the capacity of representative of the insured. Producer is an independent contractor and not an agent or employee of Company or any insurance company represented by Company. Producer shall have no authority to bind any coverage on new or renewal business, make any representation on behalf of Company, issue any certificates of insurance on behalf of Company except with the advanced permission of Company, modify the terms and conditions of any policy of insurance, or incur any liability for Company. Company shall have the right, at its sole discretion, to accept or reject applications for insurance. Producer understands and agrees that no insurance submitted for consideration is effective until acceptance is indicated in writing or a policy or binder is issued by Company unless other arrangements have been made. In the event of an unauthorized binder by Producer, Producer shall reimburse Company for all expenses incurred because of unauthorized binding including any attorneys’ fees incurred by Company in collecting such reimbursements or in denying liability.
(b) Producer understands and agrees that it is the responsibility of Producer to inform Company as to the type and amount of insurance coverage to be considered for quotation. Company assumes no responsibility toward Producer or any insured with regard to the adequacy, amount or form of coverage obtained through Company. Company does not guarantee the solvency of any insurer or the insurer's ability to pay claims.
(c) Producer understands that Company is relying upon the accuracy of information provided by the insured through Producer and submitted to Company. It is the responsibility of Producer to disclose to Company the existence of any conditions which Producer is or should be aware of that may affect the insurability of the applicant and/or insured. By submitting information to Company, Producer represents and warrants, to the best of its knowledge, that such information is true, accurate, and complete.
(d) If Producer, with advanced permission of Company, issues certificates of insurance, Producer shall hold Company and the insurance carrier harmless to all claims or errors. In no event shall Producer have authority to issue certificates of insurance adding additional insureds and/or special wording where such additional insured coverage and/or special wording is not already included in the applicable policy.
(e) Producer assumes full responsibility for notifying its insureds of policy expirations. Producer acknowledges that expiration notices furnished by Company are supplied as a convenience only and that Company assumes no responsibility for the accuracy of or failure to provide such notices.
(f) Producer acknowledges and agrees that Company, in its sole discretion, may elect to exclude a Jencap operating subsidiary, division or program from the scope of this Agreement or to limit Producer’s ability to place business through any Jencap operating subsidiary, division or program.
2. Payment of Premiums; Financing.
(a) Producer shall immediately remit to Company all premiums accruing on insurance written through Company per the terms of the proposal and statement/invoice rendered by Company. Producer guarantees payment to Company of all premiums due for insurance written through the Company, whether or not collected by Producer, including but not limited to deposits, audits, endorsements, and countersignature fees (if any). Producer acknowledges and agrees that any extension of credit by Producer to insured or any other person is solely at Producer’s risk.
(b) All funds representing premiums received or return premiums due to the insured in the possession of Producer shall be held by Producer in a fiduciary capacity (and if required in a fiduciary account in accordance with the laws of the state in which the fiduciary account is located), and shall be promptly accounted for and paid to, as applicable, Company or the insured. Producer may retain interest income on any funds so held in accordance with applicable law.
((c) Company reserves the right to cancel policies for non-payment of premium. Producer acknowledges that coverages effected by Company at the request of Producer are not subject to flat cancellation after the inception date of the policy. Cancellation for non-payment or otherwise shall not relieve Producer of its obligations under this Agreement.
(d) Company shall have the right to offset commission or other payments due to Producer from Company against amounts owed to Company or any affiliate of Company by Producer.
((e) Producer shall forward to Company immediately upon receipt, or upon Producer’s knowledge thereof, all correspondence or notices with relation to the financing or proposed financing of premiums by any policyholder, and Producer agrees to instruct the premium finance company to pay Company direct for all premiums which have been so financed. Producer shall not accept premium financing on policies for which the premium is short-term or short-term minimum earned.
(f) Producer is not and shall not hold itself out as the agent of Company or the insurance company for the purpose of obtaining premium financing and agrees to hold Company harmless from any responsibility for payment to the premium finance company, and further agrees that financing arrangements do not diminish the responsibility for the timely payment of premiums by Producer to Company. Company or any insurance company represented by it reserves the right to refund premiums directly to the premium finance company upon cancellation of a policy(ies). Producer shall refund applicable commission to the premium finance company or Company in the event of cancellation of a policy(ies).
(a) Company will allow commissions at such rates as agreed from time to time by the parties hereto. In the event of return premium becoming due, Producer shall immediately refund unearned commission to Company at the same rate at which commission was originally allowed. Commissions are allowed only on premiums and not on taxes or policy fees.
(b) In the event Company must collect premiums directly, Producer waives any right to commission payments in connection therewith.
Producer shall take all commercially reasonable acts to properly safeguard the interests of the Company. Producer shall immediately notify and provide full details of any complaints, inquires, claims, suits, notices of loss, occurrences or incidents that may give rise to a claim or loss under a policy written pursuant to this Agreement to the applicable insurance company in accordance with the reporting provisions outlined in the applicable policy. Producer agrees to cooperate fully with Company and its insurance companies to facilitate the investigation, adjustment, settlement or payment of any claim when and as requested. Producer has no authority to admit any liability, assign losses to be adjusted, negotiate or settle any loss on behalf of Company or its insurance companies, or otherwise act or make any statement in connection with such claim on behalf of Company or its insurance companies.
5. Representations and Warranties; Covenants. Producer represents, warrants and covenants as follows:
(a) Producer, if an entity, is a duly organized and existing entity, in good standing pursuant to the laws of the state in which it is organized.
(b) Producer has the necessary authority to execute, deliver, perform and enter into this Agreement under applicable federal, state and local laws, and to consummate all transactions contemplated by this Agreement, including, but not limited to, the full authority of the Producer’s client to place insurance on its behalf.
(c) Producer maintains and will continue to maintain during the term of this Agreement errors and omissions coverage for itself and its agents, solicitors and employees satisfactory to the Company in an amount no less than $1 million per claim and in the aggregate with an insurance company rated A- or better by A.M. Best Company. Upon commencement of this Agreement and upon renewal of such coverage thereafter, or upon Company’s request at any time, Producer shall furnish to Company evidence of such insurance and shall notify the Company in the event such coverage is discontinued for any reason.
(d) Producer has obtained all applicable federal, state and local licenses necessary to conduct the business contemplated hereunder, including all applicable insurance producer licenses, and agrees to maintain them in good standing at all times during the term of this Agreement. Upon Company’s request at any time, Producer shall furnish to Company evidence of such licensure. If for any reason Producer fails to maintain any license granted by either federal, state or local authorities, or if any such license is terminated or suspended, then it shall immediately notify the Company in writing of this occurrence.
(e) Producer is in compliance with and shall comply with all applicable laws and regulations governing the conduct of business subject to this Agreement in the jurisdiction(s) involved. Producer understands that certain insurance contracts may be placed by Company with insurers not licensed in the state in which the insured is located, and certain filings and tax payments may be required to comply with the insurance laws of the state in which the risk is located. For risks being placed with an excess and surplus lines or an unlicensed insurer, Producer shall comply with any applicable state law requiring a diligent attempt to procure such insurance from authorized insurers.
(f) This Agreement has been duly authorized the executed and delivered by Producer, and this Agreement constitutes a legal, valid and binding obligation of Producer and its successors and assignees, enforceable against the Producer in accordance with its terms, and the individuals executing this document are fully authorized by Producer to enter into this Agreement.
(g) The terms and conditions of this Agreement, and Producer’s performance under this Agreement, do not violate Producer’s organizational documents, any instrument relating to the conduct of the Producer’s business or any other agreement to which the Producer is a party, or any law, rule, regulation, judgment or order applicable to Producer.
(h) There is no litigation or investigation pending or, to the Producer’s knowledge, threatened, which if determined adversely to the Producer, would adversely affect the enforceability of this Agreement.
The parties acknowledge that in the course of the performance of their respective obligations, each party (“disclosing party”) may make available to the other party (“receiving party”) certain information pertaining to its business and operations that is understood to be confidential and/or proprietary (“Information”). Receiving Party agrees that, as a condition to being provided the Information, such party will use any Information only in connection with the performance of its obligations hereunder. Receiving Party agrees not to disclose any Information to any third party other than directors, officers, affiliates, employees, advisors, and agents (collectively, “Representatives”) of such party that have a need to know to such Information, and shall cause all such Representatives to abide by the terms of this Agreement. Each party agrees to be responsible for any breach of this Agreement by any of its Representatives. The obligations set forth in this paragraph will not apply to any Information which: (a) at the time of disclosure is generally available to the public or (b) which becomes generally available other than through a breach of this obligation of confidentiality. In the event a receiving party is requested or required by law, rule, regulation, court order, or other legal process to disclose any Information, the receiving party shall provide the disclosing party with prompt notice thereof, cooperate with any of the disclosing party’s efforts to seek a protective court order or similar remedy, and, in any event, disclose such Information only to the extent the receiving party is so advised on the written advice of its counsel.
Producer shall maintain true, accurate, and complete records pertaining to insurance business transactions under this Agreement during the term of this Agreement and for the greater of: (i) such time period as required by applicable law or (ii) seven (7) years after termination of this Agreement. During the term of this Agreement and thereafter, Producer shall permit Company, its insurance companies, or their respective representatives to inspect and audit records maintained by Producer relating to insurance business under this Agreement during normal business hours upon request. The costs of such inspection and audit, including the costs of making copies of relevant records, shall be borne by Company or its insurance companies, as the case may be. However, any expenses incurred by Company or its insurance companies for inspections or audits conducted by or on behalf of a regulatory authority as it specifically relates to the business produced under this Agreement shall be borne by Producer.
Producer shall not issue or cause to have issued any letter, advertisement, circular, pamphlet or other publication or statement referring to or using the name of Company, its parent, affiliates or subsidiaries or any insurance company through which Company places business, without the express prior written consent of Company. In the event that Company shall be subjected to loss or expense arising out of any unauthorized advertisement, publication or statement of Producer, Producer shall be liable for and defend, indemnify and hold Company harmless from any resulting loss and expense.
Producer shall defend, indemnify and hold Company and its respective successors and assigns, affiliates, partners, managers, directors, officers, employees, agents, advisors and representatives (as applicable, the “Company Indemnified Parties”) harmless from and against, and pay and reimburse the Company Indemnified Parties for any and all loss, liability, claim, damage, cost or expense (including, without limitation, diminution in value and reasonable attorneys’ fees and expenses) (collectively, a “Claim”) which the Company Indemnified Parties may incur, directly or indirectly, as a result of or arising from, any (i) inaccuracy in the Producer’s representations and warranties, (ii) act, failure to act, error or omission on the part of Producer, (iii) breach of this Agreement by Producer, or (iv) any violation of law by Producer. Company shall indemnify and hold Producer harmless against any Claim which Producer may incur to the extent caused directly by any negligent act, error or omission on the part of Company in the placement of any business placed by the Company for Producer.
10. Liability Limitation.
NOTWITHSTANDING ANYTHING IN THIS AGREEMENT TO THE CONTRARY, IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER FOR ANY SPECIAL, INDIRECT, CONSEQUENTIAL, INCIDENTAL OR PUNITIVE DAMAGES, LOSS OF PROSPECTIVE PROFITS, EXPECTED BUSINESS, GOODWILL, OR ON ACCOUNT OF EXPENDITURES OR COMMITMENTS IN CONNECTION WITH THE BUSINESS OF THE COMPANY OR OF THE PRODUCER OTHER THAN AS SET FORTH IN THE INDEMNIFICATION OBLIGATIONS IN THIS AGREEMENT.
11. Ownership of the Business.
The parties agree that in the event of termination of this Agreement, if Producer has accounted for and paid over all premiums or other monies for which it is or may be liable, the Producer’s records and use and control of expirations shall remain the property of the Producer; otherwise, the use and control of the expirations shall become the property of Company.
12. Term and Termination.
This Agreement will continue until terminated by either party as follows: (i) for breach at any time by giving the other party seven (7) days written notice of termination or (ii) for convenience upon delivery of thirty (30) days prior written notice. In the event of termination for breach, the non-breaching party may rescind the termination notice in the event the breach is cured within the seven (7) day notice period. Additionally, this Agreement will also terminate (1) automatically, if any regulatory authority cancels or declines to renew the Producer’s license or certificate of authority; (2) automatically, on the effective date of the sale, transfer, or merger of Producer’s business with the provision that Producer may, subject to Company’s written consent (in its sole discretion), appoint the successor as a Producer; or (3) immediately, upon either party giving written notice to the other of termination because of fraud, insolvency, failure to pay balances, or willful or gross misconduct. Additionally, in the event Producer provides to Company a written notice of objection to an amendment as described in Section 16 below, Company may, in its sole discretion, elect to immediately terminate this Agreement. Within thirty (30) days after the effective date of termination of this Agreement, Producer shall complete the collection and accounting to Company of all premiums, commissions and other transactions unaccounted for as of effective date of termination or arising thereafter in respect of outstanding policies of insurance, including but not limited to, return premium and return commissions. Subject to Company’s prior written approval, outstanding policies will be permitted to run to their natural expiration date.
The obligations set forth in Section 6 (Confidentiality), Section 7 (Records), Sections 9 (Indemnity), 10 (Liability Limitation), 13 (Survival) and 15 (Governing Law) shall survive termination of this Agreement.
Any notice hereunder to the Company shall be addressed to Company’s address set forth on the signature page hereof, and any notice hereunder to the Producer shall be addressed to Producer at Producer’s address on the signature page hereof, subject to the right of either party to designate at any time hereafter in writing some other address. Any notice shall be deemed to have been duly given when delivered personally, by nationally recognized overnight courier service, or by mail (registered or certified mail, postage prepaid, return receipt requested).
15. Governing Law.
This Agreement shall be governed by and construed in accordance with the laws of the State of New York, without regard to its conflicts of law provisions.
Company may amend this Agreement by giving Producer ninety (90) days prior written notice of the revision, after which such amendment shall be deemed effective unless Producer provides written notice of objection to Company prior to the expiration of the notice period. Except as set forth in the preceding sentence, the terms of this Agreement may only be amended by written agreement executed by duly authorized representatives of both Company and Producer. No waiver of any term of this Agreement shall be effective unless signed by a duly authorized representative of Company.
This Agreement and the obligations hereunder may not be assigned by Producer without the prior written consent of Company. Any purported assignment or delegation by the Producer in violation of the foregoing shall be null and void ab initio and of no force and effect.
If any term, provision, covenant or restriction of this Agreement, or any part thereof, is held by a court of competent jurisdiction of any foreign, federal, state, county or local government or any other governmental, regulatory or administrative agency or authority to be invalid, void, unenforceable or against public policy for any reason, the remainder of the terms, provisions, covenants and restrictions of this Agreement shall remain in full force and effect and shall in no way be affected or impaired or invalidated.
This Agreement may be executed simultaneously in two or more counterparts, each of which shall constitute an original, but all of which taken together shall constitute one and the same agreement.
20. Delivery by Facsimile or Comparable Electronic Transmission.
This Agreement, the agreements referred to herein, and each other agreement or instrument entered into in connection herewith or therewith or contemplated hereby or thereby, and any amendments hereto or thereto, to the extent signed and delivered by means of a facsimile machine, electronic mail, or comparable electronic transmission, shall be treated in all manner and respects as an original agreement or instrument and shall be considered to have the same binding legal effect as if it were the original signed version thereof delivered in person.
21. Entire Agreement.
This Agreement along with any addendum attached hereto and those documents expressly referred to herein embody the complete agreement and understanding among the parties with respect to the subject matter hereof and supersede and preempt any prior understandings, agreements or representations (including, without limitation, any term sheet) by or among the parties with respect to the subject matter hereof, written or oral, which may have related to the subject matter hereof in any way.
IN WITNESS WHEREOF, Company and Producer have executed this Agreement as of the date first above written.