ANALYSIS OF PROFIT-SHARING AGREEMENTS
Use this form to review your company profit-sharing deals.
Complete this checklist for each major company represented. A “no” answer should trigger further negotiations.
Company Name: ___________________________________________________________
Minimum Written Premium to Qualify: ____________________
Stop-Loss Provision Amount: ___________________ [ ] Yes [ ] No
Is all business written included (except retros, crop-hail, assigned risk, and so forth)? [ ] Yes [ ] No
Exceptions: _______________________________________________________________
Are expenses well defined? [ ] Yes [ ] No
Are expenses net of any company profit factor? [ ] Yes [ ] No
Are income expenses and commissions all based on earned (not written) premiums? (This is particularly important to a rapidly growing agency.) [ ] Yes [ ] No
Are you given credit for large audits in your earned premium totals? [ ] Yes [ ] No
Are loss figures net of incurred but not reported losses? [ ] Yes [ ] No
Does the agreement pay more than 15% of net underwriting profit to the agency?
[ ] Yes [ ] No
Does the percentage of profit paid increase as profit and volume increase?
[ ] Yes [ ] No
Is more emphasis placed on profitability than on growth, since this is controlled by the company to a great extent? [ ] Yes [ ] No
Is there an arbitration clause? [ ] Yes [ ] No
If deficits are carried over, are credits also? [ ] Yes [ ] No
Is the prime interest rate paid on any profit-sharing check received after April 1?
[ ] Yes [ ] No
If the agency is terminated by the company, will the agreement continue to pay you for profitable runoff business? [ ] Yes [ ] No
Completed by: ____________________________________ Date:________________