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Factors to Consider
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Agreement
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I. Producer Duties
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A. Production activity
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1. which licenses to obtain and maintain
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2. types of business to solicit
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3. meet established production goals
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B. Service and support activity expected
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1. type and extent of activity - placing business handling claims, making collections
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2. account development - house and/or own accounts
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C. Work hours and related subjects - vacations, sick leave, holidays, leaves of absence, jury duty, military duty
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D. Obligation to devote all working time to business of agency - other business activities only with permission
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E. Provide insurance - types required (E & 0, Fidelity, Auto) limits, evidence of coverage, who pays
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F. Compliance with agency rules regarding:
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1. confidentiality of client data
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2. use of agency property
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3. collecting and remitting premiums
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4. attending agency meetings
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5. educational requirements - what, when, how, who pays
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G. Limits of authority
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1. dealing with customers and companies - binding, advancing premiums, underwriting, extending agency credit
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2. incurring agency expense
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3. hiring or firing support personnel
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II. Compensation
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A. Basic compensation
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1. salary
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2. commission - on new and renewal business
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3. commission with a draw
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B. Participation in other agency income - bonus and contingent commissions, consulting fees, prizes and contests, discretionary bonuses
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C. When compensation is earned and paid
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III. Ownership of expirations or dollars of value
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A. Exclusively by agency?
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B. Exclusively by producer?
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C. Jointly by agency and producer - percentage owned by each?
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IV. Option to purchase agency interest - waiting period, conditions, limits, price, payment method
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V. Vesting of commissions - waiting period, schedule, value, exchange for ownership share
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VI. Employee benefits
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A. Transportation - car, business mileage, personal mileage
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B. Expense account - business, travel, moving
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C. Memberships - clubs, service organizations
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D. Group Benefits - what/which types available, who pays
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E. Retirement plans and stock options
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F. Contingency plan in event of death, disability, or divorce
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VII. Agency duties
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A. Pay compensation|
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B. Supply prospects - leads, house accounts
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C. Provide office facility and support staff
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D. Handle advertising and public relations
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E. Secure and maintain company markets
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F. Maintain production and validation records
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G. Provide insurance - E & O, Auto, other
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H. Provide training as needed
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VIII. Termination
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A. Contract duration
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B. Cause for termination - at will, for cause, early or otherwise
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C. Notice required - form, time
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D. Severance pay arrangements
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E. Return of agency property - records, supplies, equipment
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F. Post-termination controversy or claims - procedure for arbitration, remedies
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G. Producer's right to copy files in event of purchase
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H. Producer's Right to Purchase Agency Accounts - time, procedure, price, method of payment and other terms, accounts available for purchase
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