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... the nature of these items and adjustments will help owners better understand the value of their agencies. We define recurring revenues as commission and fee revenue related to insurance sales and services. It includes Property/Casualty, Group Benefits, and Life commissions, fee income, contingent income, and investment income. Revenue that's not recurring includes first year Life commissions, fees for one-time consulting projects, or bonus income for a book rollover. Commission from brokered business is another example; the outside producer who places the business, not the agency ... rather than one producer, and the agency has a better chance of keeping the account should the producer depart. We define recurring expenses as expenses necessary to support the generation and retention of insurance related income. We excluded such unnecessary expenses as country club dues, automobile leases for non-employee family members, and season tickets to sporting events. We also exclude non-recurring expenses. These might include professional fees for changes to an employee benefit program, one-time purchases of major office equipment, or producer commissions paid for non-recurring Life income. TRACKING DOWN ... value, we multiply an agency's sustainable earnings capacity, the bottom line, ' as demonstrated in its income statement, by a subjective multiple determined through an analysis of the inherent risk factors of the agency. Tangible Net Worth is the sum of the tangible assets less liabilities. One caveat is that industry convention typically expresses an agency's purchase price as a multiple of revenue. This often causes people to assume incorrectly that an agency's value is derived by utilizing a multiple of revenue. However, as we've just noted, an agency's value ...

...d Life commissions, fee income, contingent income, and investment income. Reve...nses as country club dues, automobile leases for non-employee family members, ...

...ding premiums, loss ratios, and contingents earned. Are all contracts assigna... Types of coverages purchased through the agency an...

... to start the LLC. The LLC's identity might not show on the declaration sheets or be know to the public at all; or it may be publicized for marketing purposes. The LLC has a master producer code, and the member agencies each have subproducer codes. Contingent bonuses might be shared equally, or based on relative production with the various carriers. The LLC itself might have no employees; each agency, perhaps in different cities, would retain its own staff. Entity format. Each agency might actually contribute its accounts directly ... sell agreements. It's important to note that LLCs aren't the same as limited liability partnerships (LLPs) . LLPs are mostly for classic professional' firms, such as those comprised of CPAs or attorneys. They don't protect members from commercial-type debts, such as a premises lease, or from their own professional malpractice; but they do provide protection from cross-liability for E&O and torts of the LLP's other participants. Your clients-and you-can benefit from LLCs in a number of ways: Consider using one instead of a partnership or sole proprietorship ... have thousands of articles, checklists, tip sheets, sales letters, and more! Communications Marketing Customer Service Planning Finance/Accounting Risk Management Human Resources Selling Legal and E&O Technology Life/Financial Services Glossaries Management Resources & Links Categories Popular Recent All Back Limited Liability Companies: What You Need To Know 4/30/2013 10:43:12 PM by CompleteMarkets Editor , Larry Morrison This content has not been rated yet. LIMITED LIABILITY COMPANIES: WHAT YOU NEED TO KNOW by Gary Jacobson and Larry Morrison Limited liability ...

... life and life related lines together with surety and fidelity bonds except in instances where the word insurance' shall be specifically limited to any one or more line of business. (c ) Net Annual Commissions' shall mean gross annual commissions less return commissions excluding all so-called contingent, bonus and profit sharing commissions. Included in Net Annual Commissions shall be all fees received from Accounts for the placement of insurance or other services but shall exclude so-called late charges on overdue premiums. Commissions on so-called audit premiums shall be included as Net Annual Commissions ... has in effect a policy of errors and omissions insurance with limits of liability of not less than $1 million aggregate per occurrence underwritten by an insurance company licensed to write such business in the Commonwealth of Massachusetts. 5.13 No Party is in default under any contract, lease or agreement, whether written or oral to which it is a Party or is bound. 6. Obligations and Undertakings of Each Party: 6.1 Each Party shall maintain in full force and effect a full resident insurance broker's license in the Commonwealth of Massachusetts. 6.2 ... Party shall notify CIS of any and all litigation to which such Party may become a Party, whether as plaintiff or defendant. 6.3 Each Party shall notify CIS of any investigations of such Party by any governmental agency and of any hearings which may be convened by any governmental agency of which the Party is the subject. 6.4 Each Party shall maintain in effect for a period of not less than five years from the date CIS shall become operational a policy of errors and omissions insurance with limits of liability of $1 million in the ...

... related lines together with surety and fidelity bonds except in instances where the word insurance' shall be specifically limited to any one or more line of business. &# 160 (c ) Net Annual Commissions' shall mean gross annual commissions less return commissions excluding all so-called contingent, bonus and profit sharing commissions. Included in Net Annual Commissions shall be all fees received from Accounts for the placement of insurance or other services but shall exclude so-called late charges on overdue premiums. Commissions on so-called audit premiums shall be included as Net Annual Commissions ... a policy of errors and omissions insurance with limits of liability of not less than $1 million aggregate per occurrence underwritten by an insurance company licensed to write such business in the Commonwealth of Massachusetts. &# 160 5.13 No Party is in default under any contract, lease or agreement, whether written or oral to which it is a Party or is bound. &# 160 6. Obligations and Undertakings of Each Party: &# 160 6.1 Each Party shall maintain in full force and effect a full resident insurance broker's license in ... Commonwealth of Massachusetts. &# 160 6.2 Each Party shall notify CIS of any and all litigation to which such Party may become a Party, whether as plaintiff or defendant. &# 160 6.3 Each Party shall notify CIS of any investigations of such Part 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 ...

...g income out in salaries, bonuses, lease payments, etc., which generate deduct...e corporate shield against personal liability important? Does the agent have s...

... increased or decreased, as the case may be, by one-sixth of the total adjustment to the Base Price. The Base Price shall be subject to further adjustment as follows: (i ) in the event that during the year 1994 the Agency shall receive any so-called contingent, bonus or profit sharing commissions which shall be on account of business produced by the Agency during the year 1997 or prior thereto, the Buyer shall pay to the Sellers an aggregate amount equal to 100 percent of such commissions in excess of the first $28 ... . The execution and delivery of this Agreement and the performance of the transactions contemplated hereby will not (i ) result in a breach of or constitute default under or give rise to rights of any kind in anyone not a party hereto pursuant to any provision of any lease, license or other agreement to which either of the Sellers are a party or are bound or by which any of their properties or assets may be bound or affected, nor (ii) violate any order, writ, injunction or decree of any court or ... ' knowledge, in accordance with generally accepted accounting principles, consistently applied throughout the periods covered thereby and present fairly the financial condition of the Agency as of the dates thereof. The aforesaid financial statements make adequate provision for or disclosure of all fixed, absolute and contingent liabilities, obligations and commitments of the Agency including, but not limited to, accrued taxes as of the dates thereof. No material adverse changes or events have occurred or will occur prior to the Closing hereunder affecting the condition of the Agency, financial or otherwise, ...

... increased or decreased, as the case may be, by one-sixth of the total adjustment to the Base Price. The Base Price shall be subject to further adjustment as follows: (i ) in the event that during the year 1994 the Agency shall receive any so-called contingent, bonus or profit sharing commissions which shall be on account of business produced by the Agency during the year 1997 or prior thereto, the Buyer shall pay to the Sellers an aggregate amount equal to 100 percent of such commissions in excess of the first $28 ... . The execution and delivery of this Agreement and the performance of the transactions contemplated hereby will not (i ) result in a breach of or constitute default under or give rise to rights of any kind in anyone not a party hereto pursuant to any provision of any lease, license or other agreement to which either of the Sellers are a party or are bound or by which any of their properties or assets may be bound or affected, nor (ii) violate any order, writ, injunction or decree of any court or ... ' knowledge, in accordance with generally accepted accounting principles, consistently applied throughout the periods covered thereby and present fairly the financial condition of the Agency as of the dates thereof. The aforesaid financial statements make adequate provision for or disclosure of all fixed, absolute and contingent liabilities, obligations and commitments of the Agency including, but not limited to, accrued taxes as of the dates thereof. No material adverse changes or events have occurred or will occur prior to the Closing hereunder affecting the condition of the Agency, financial or otherwise, ...

... increased or decreased, as the case may be, by one-sixth of the total adjustment to the Base Price. The Base Price shall be subject to further adjustment as follows: (i ) in the event that during the year 1994 the Agency shall receive any so-called contingent, bonus or profit sharing commissions which shall be on account of business produced by the Agency during the year 1997 or prior thereto, the Buyer shall pay to the Sellers an aggregate amount equal to 100 percent of such commissions in excess of the first $28 ... . The execution and delivery of this Agreement and the performance of the transactions contemplated hereby will not (i ) result in a breach of or constitute default under or give rise to rights of any kind in anyone not a party hereto pursuant to any provision of any lease, license or other agreement to which either of the Sellers are a party or are bound or by which any of their properties or assets may be bound or affected, nor (ii) violate any order, writ, injunction or decree of any court or ... ' knowledge, in accordance with generally accepted accounting principles, consistently applied throughout the periods covered thereby and present fairly the financial condition of the Agency as of the dates thereof. The aforesaid financial statements make adequate provision for or disclosure of all fixed, absolute and contingent liabilities, obligations and commitments of the Agency including, but not limited to, accrued taxes as of the dates thereof. No material adverse changes or events have occurred or will occur prior to the Closing hereunder affecting the condition of the Agency, financial or otherwise, ...