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... x No Thanks Loading.. Profile Checksheet Of Agency Heading Toward Bankruptcy 4/30/2013 by CompleteMarkets Editor , Chris Burand This content has not been rated yet. How healthy is your agency? This checksheet and financial analysis criteria can give you the answer. Use these 10 items to check the financial health of your agency: Trust ratio under 1.1 x More than 15% of accounts receivable more than 90 days old Commission growth greater than 5% Producer compensation greater than 30% on renewal Debt service greater than profit Made acquisitions equal to 25% or more of total current revenue at price above 1.5x in last three years Property/Casualty commission per producer less than $250,000 Revenue per employee less than $90,000 Expense budget not prepared or monitored monthly Salary caps and compensation planning for staff not set at start of each year If you checked three or more of these items, you're in the danger zone! Here's an analysis of the basic criteria you can use for agency financial analysis: BALANCE SHEET ANALYSIS TRUST RATIO Cash plus accounts receivable/premiums payable should ___ be greater than 1.1x. If less than 1.0x, you're spending carrier premium. RECEIVABLES RATIO Accounts receivable/premiums payable. The lower the ___ better. Should be .65 or less; if above 1.0, you're advancing funds. CURRENT RATIO Current assets/current liabilities. Should be greater ___ than 1.1 x. If less than 1.0x, must retain profits. NUMBER OF DAYS WORKING CAPITAL Current assets minus current liabilities equals net ___ working capital. Total agency expense divided by 365 ...

... law, the borrower must use the proceeds to repair the property or the lender will be entitled to apply them to the loan. The fact that the property is being repaired does not excuse the owner/borrower from meeting mortgage payments. Thus the owner may have to default on the loan, giving the lender an excuse to take the insurance proceeds if no payment can be made. This is not always undesirable. As a result of the insurance payments, the owner may be able to pay off the loan and demolish the building-which could be more desirable than the owner's pre-quake condition, since the owner might then have some insurance money and own the land free and clear of debt. When the value of the property before the earthquake was less than the loan, the borrower may find that bankruptcy provides an excellent opportunity to restructure the debt and regain some equity. The rules of bankruptcy are complicated. However, a bankrupt borrower can, under the right circumstances, force the lender to reduce the loan to the value of the property and then pay interest on the loan at the reduced amount. When the property is rebuilt, the owner may have some equity because it will now be worth more than the reduced loan. Moreover, the property can be designated as cash flow as a result of lower debt. For many people bankruptcy is not acceptable. On filing bankruptcy, all of an individual's assets become subject to control of the court. However, a partnership or real estate investment company with a limited number of properties in its asset and operational base may greatly benefit by filing ...

... for local service providers or the Federal Communications Commission for long-distance and cellular providers at (888) CALL-FCC or go to http://www.fcc.gov/complaints . Employment. If you believe that someone is using your SSN to apply for a job, call the Social Security Administration's Fraud Hotline at (800) 269-0271. Also call the SSA at (800) 772-1213 to verify the accuracy of the earnings reported on your SSN and to request a copy of your Social Security Statement. Follow up your calls in writing. Driver's license. If you suspect that an identity thief is using your name or SSN to get a driver's license or a non-driver's ID card, contact the Department of Motor Vehicles. If your state uses your SSN as a driver's license number, ask to substitute another number. Bankruptcy. If you believe that someone has filed bankruptcy using your name, write to the U.S. Trustee in the Region where the bankruptcy was filed. For a listing of the U.S. Trustee Program's Regions, go to www.usdoj.gov/ust . You should also file a complaint with the U.S. Attorney or the FBI in the city where the bankruptcy was filed. Original article by Chris Wright Edited by CompleteMarkets editorial team. Login or Register (for FREE) to gain access to thousands of other great articles. Need more reasons to join? Need insurance for you, your business or your family? Get quality appointments - Save yourself a whole lot of time & money when you use our directory of carriers, wholesalers and service providers. Negotiate lucrative contracts with carriers and wholesalers. Net result ...

...t six years. In fact, personal bankruptcies reached a record high of 1.35 mill...

... nondiscriminatory, which usually means you must offer the same package to basically all your employees. Many other rules also apply, such as how much can be contributed. A Non-Qualified plan is much simpler, with far fewer rules to follow. But to be non-qualified it MUST be discriminatory. You must limit it to a group of management or highly compensated employees. UNFUNDED To avoid a number of unpleasant issues, such as immediate taxation to the employee and possible inadvertent classification as a qualified' plan, the plan must be technically unfunded. Unfunded' does not mean that the company cannot set aside money to pay for the future obligation. But it does mean that if the company chooses to do so, any money set aside must remain available to the general creditors of the company in the event of bankruptcy. A Rabbi Trust' is sometimes used to restrict further the way set-aside money can be used. Basically, a Rabbi Trust ensures that the set-aside money can only be used to pay for the deferred compensation obligation, unless, of course, the company goes bankrupt. In the event of bankruptcy, the money in the Rabbi Trust becomes available to the general creditors of the company. Remember, the company does not get a tax deduction for deferred compensation until the money is actually paid to the producer. Any money set aside must be done with after-tax dollars. CONSTRUCTIVE RECEIPT, ' ECONOMIC BENEFIT' The producer must not receive Constructive Receipt' or Economic Benefit. Constructive Receipt means that there must be some chance that the money might not get paid. This is usually met by specifying certain ...

... mortgages or dividend-paying stocks. Risk #4 : Stock Market Fluctuations. Because it's practically impossible to forecast what will happen to stocks, many retirees fall prey to major stock market losses. One major stock market downturn, and your nest egg could disappear in the blink of an eye. How to deal with it: First of all, the SOA says retirees and older workers should limit their stock market exposure. If you do invest in the stock market, be sure to diversify your stocks and spread your money among different investment classes and individual securities. This will greatly decrease your risk. You might also consider investing in financial products that invest in stocks, but guarantee against the loss of principal, such as mutual funds. Risk #5 : Disappearing Retirement Funds. If your employer declares bankruptcy, what happens to your pension? If your annuity insurer becomes insolvent, where does that leave you? Many terrible things can happen to your retirement funds but there are ways to manage these risks. How to deal with it: Before you invest your money do your homework. Find out your employer's credit rating to determine if they might be at risk for bankruptcy. Look into your insurance company's claims-paying ability rating. Of course, you are already protected from many of these risks. If your employer does go out of business, the Pension Benefit Guaranty Corp. will insure your defined-benefit pension plan (up to certain limits.) Annuity companies are covered by state insurance guaranty funds up to specified limits which means if the insurer becomes insolvent, the claims will still be paid. Login ...

... , financial or otherwise, of the Seller and the assets to be sold to the Buyer hereunder. A material adverse change in the condition of the Seller's business shall be deemed to include (but shall not be limited to) loss of Subject Accounts which, in the aggregate, produced Net Annual Commissions of more than S5,000 in the aggregate. Loss of a Subject Account shall include (i ) expiration of any insurance policy in effect for such account during the 12 months ending November 30, 19_, without the same being renewed, (ii) receipt by the Seller of notice that a Subject Account does not intend to renew its business through the facilities of the Seller when current insurance business expires, (iii) the filing by or against a Subject Account of any petition under bankruptcy or other insolvency laws or (iv) acquisition (or execution of a binding agreement to acquire) of substantially all of the assets or capital stock of a Subject Account. (h ) The Seller shall have purchased, at its own expense, the run-off or tail endorsement under its errors and omissions policy as required pursuant to section 14(z ) hereof. For the period from the execution hereof through the closing hereunder, the Seller shall (i ) continue to operate its business in the normal, usual and customary fashion consistent with the manner in which it has been operated heretofore; (ii) endeavor, to the best of its ability, to renew all insurance coverages scheduled for renewal between the execution of this Agreement and the Accounting Date; (iii) process all renewals ...

...r hand, corporate lay-offs and bankruptcies are being announced almost every d...

... transfer ownership of an agency, the IRS wants to know in order to assess taxes. Since we've already agreed that the greatest asset in almost every agency is its customer list, the IRS predicates the tax assessment due on the transferable value of that asset. Is this taxable in the form of gain over basis, or strictly ordinary after an initial corporate tax bite? The area of ownership is ordinarily found in employment agreements between owners, as well as producers and personnel, in accordance with such distribution system configurations as independent agent or captive agent. These relationships include: A. INDEPENDENT AGENTS WITH THEIR INSURERS: The agreement states that the agency owns the expirations. The only ownership stipulation concerns an agency that's in default in payment of premiums to the insurer. However during our participation in one bankruptcy court case, the court ruled that the expirations were not the property of the insurer, but rather an asset belonging to the court. B. INDEPENDENT AGENCIES WITH THEIR PRODUCERS: There are several types of ownership arrangement, including: The agency owns all business produced by the producer in accordance with the agency-producer contract. Producers own the business that they brought to the agency in accordance with an agreement. Producers own 50% of the business that they produce while at the agency, with the agency having right of first refusal to acquire the business in the event the producer decides to leave the agency (or a greater minority percentage) . Producers own a percentage of the business that they produce over a period of time, with the agency having the first right of refusal in the event ...

... , in an April 1997 ruling cited the testimony of two experts who evaluated the book of business of an insurance agency. In Vance Dunham, Debtor and Texas Truck Insurance Agency v. Harry Cure, Chapter 7 Trustee for Vance G. Dunham, Debtor, Appellee, the Court ruled that the Trustee's expert presented impressive credentials, extensive involvement in the insurance industry, and substantial experience in valuing insurance agency businesses. In contrast, the Court said the expert hired by Texas Truck had little experience in either the insurance industry or the valuation of insurance agency businesses. He didn't hold an insurance license, and hadn't worked in the insurance industry. He had no formal education in agency valuation, hasn't written any articles on the subject, and had appraised only insurance agencies. Vance Dunham proceeded from the bankruptcy court, which accepted the Trustee's expert opinion, to a Federal Court, which once again accepted the method of agency evaluation that had been developed over many years. It then proceeded to the Fifth Court of Appeals who made the ruling cited above (the expert for the Trustee in Vance Dunham was Roy Phillips, one of the authors of this article) . The U.S. Supreme Court also ruled that evidence which isn't grounded in scientific methodology and procedures is no more than subjective belief or unsupported speculation, represents unreliable evidence that doesn't assist the trier of fact, and is therefore inadmissible. If this is the case, what benchmarks must an expert meet under the Daubert decision? The Texas Supreme Court ruled that the trial court can consider many factors in making a threshold determination of admissibility of ...