RESPONSIBILITY AND ASSIGNMENT OF DEBT. A common practice is for Companies to annualize Commissions and Bonuses, specifically the Companies accept to pay an advance on Commissions and Bonuses to the Advisor and to the General Agent on the condition that the premiums of the Policy are paid for a minimum number of months (usually 24 to 36 months).
6.1 Commissions and Bonuses so agreed upon and paid to the Advisor by the Companies thus in fact represent advances of Commissions and Bonuses paid to the Advisor for the portion of sums over and above what was actually earned by the Advisor, based on the number or amount of premiums paid by the client. The Advisor recognizes that these advances of Commissions and Bonuses constitute a demand loan to the Companies and/or the General Agent, up to either the amount that was actually advanced or the amount which is demanded by the Company, following lapse, change or cancellation of the Policy, and this without regard for the grounds or reasons for the termination or change of the aforementioned Policy. This will hold true for all sold or transferred policies included in the Advisor's Portfolio.
6.2 Should the repayment provided for in Paragraph 6.1 of the present Agreement not be made by the Advisor on demand, the latter acknowledges and agrees to pay the General Agent an annual interest of 12%, calculated and capitalized monthly at the rate of 1% per month on the unpaid balance of advances not repaid, effective from the due date forward.
6.3 In order to guarantee repayment of any advances on Base Commissions and Bonuses to the General Agent by the Advisor, the latter will herein expressly transfer to the General Agent all of his rights to future Commission, Renewal Commission, as well as to all Bonuses which may be paid him by the companies with which he has done, does or will do business. The parties expressly agree that the General Agent may seek compensation for the amounts described in the present paragraph, without notice to the Advisor, but solely to secure repayment of Chargebacks, or on any other debts the latter owes to the General Agent or the Companies. (See Appendix C, Assignment of Receivables,)
6.4 The Advisor hereby acknowledges his indebtedness to the General Agent for any amount received from his client in payment of insurance premiums that are not remitted to the Companies within the time limit prescribe by the letter and for which the General Agent is liable to the companies. This acknowledgement of the indebtedness is specifically limite...
