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EXHIBIT 10.11
MICOA
AGENCY AGREEMENT
Mutual Insurance Corporation of America, a Michigan insurance
corporation (MICOA) and ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇-Nevada, Inc., a Nevada
corporation, ("Agency"), (sometimes commonly referred to as the Parties) agree
as follows:
A. AUTHORITY OF AGENCY
Subject to requirements imposed by law, the underwriting rules,
procedures and regulations of MICOA and this agreement, the Agency is
authorized to:
1. Solicit within the State of Nevada, receive and transmit
immediately and directly to MICOA, proposals for health care
liability insurance contracts for which a commission is specified
in the schedule of commissions provided by Exhibit A, attached
and as amended or supplemented by such attachments from time to
time.
2. Produce and deliver certificates of insurance and written binders
in accordance with MICOA underwriting requirements. The Agency is
not authorized to accept or bind any risk or to otherwise
obligate MICOA without specific authority from MICOA.
3. Provide all usual and customary services of an Agency on all
policies placed with MICOA subject to the following:
a. MICOA will not be responsible for Agency expenses including
but not limited to rent, transportation, employee hire or
solicitor's fees, postage, telegrams, telephone,
advertising, licensing fees or any other Agency expenses
whatsoever.
b. The Agency will not undertake or initiate advertising of any
nature in connection with business or policies related to
MICOA without the approval of MICOA.
4. To promptly report all claims and losses of which the Agency has
knowledge and properly notify MICOA when the Agency receives
notice of the commencement of any related legal action. Agency
shall refrain from admitting or denying liability on the part of
the company in connection with any claim or lawsuit.
5. In return for the exclusive appointment of Agency by MICOA to
sell its professional liability products listed on the attached
Commission Schedule
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in Nevada, Agency agrees not to sell any competing professional
liability products in Nevada, without the written consent of
MICOA. Provided that, if a particular risk has been submitted to
MICOA and MICOA has declined that risk, then Agency may search
appropriate markets for placement of that risk, and may place that
risk with another insurance company.
6. Designated Agent representatives upon request from MICOA will be
expected to participate in MICOA's Nevada Market Managers Group
activities and to attend all scheduled meetings.
7. MICOA will share on a project basis development costs of all
promotional materials and some advertising costs related to
Nevada sales, provided that all such expenditures or budgets for
them are approved by MICOA in writing in advance.
8. Agency may solicit subagencies for appointment, subject to
MICOA's prior written approval of each subagency following
disclosure to and review by MICOA of information requested by
MICOA for each proposed subagency. All such appointments by Agent
shall stipulate that MICOA may terminate the subagency at any
time without cause upon at least 90 days notice and that the
subagency shall comply with all MICOA requirements and duties
owed MICOA by Agency concerning solicitation, communications, and
service to insureds. Subagencies shall also be required to submit
all proposals immediately and directly to MICOA.
B. MICOA BILLED POLICIES
For business subject to Exhibit A, placed with and billed by MICOA
directly to the policyholder, the following shall apply in addition to
all the other provisions of this agreement:
1. The processing and submittal of all such business shall be
subject to provisions outlined in MICOA's written requirements
and forms as they may be implemented by MICOA from time to time;
2. Commissions on premiums shall be paid to the Agency within 15
business days of the month in which such premiums are received
and recorded by MICOA, subject to deduction by MICOA of any
return commissions due from the Agency.
3. Except as provided in Section D or unless authorized by the
Agency, MICOA or its affiliates shall not use its records of
business placed by the Agency with MICOA to solicit individual
policyholders for the sale of other lines of
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insurance or other products or services. When the Agency grants
such authorization, Agency shall be paid the applicable commission
on such sales, provided an appropriate agreement is in place with
MICOA.
4. If this agreement is terminated, MICOA shall, at the Agency's
request, provide the Agency with a list of existing MICOA-billed
policies placed by the Agency including their expiration dates.
5. The Agency's name shall appear on all policies, premium notices,
and cancellation notices to policyholders. Copies of all such
items sent to policyholders shall be provided by MICOA to the
Agency.
C. POLICY CANCELLATION
Cancellation of any policy in force, when requested in writing by the
insured, will be honored by MICOA, except for those MICOA is not
otherwise permitted to cancel.
D. EXPIRATIONS
1. In the event this Agreement is terminated for any reason, MICOA
agrees to purchase from Agency, and Agency agrees to sell to
MICOA Agency's ownership interest in the expirations for the
MICOA insurance issued pursuant to this Agreement. The purchase
price shall be two times Agency's commissions on business
produced directly by Agency during the last 12 full months
preceding the termination date. The purchase shall be completed
within 60 calendar days after the termination date. In return for
this payment, for a two-year period following the termination
date, Agency will not directly or indirectly sell any
professional liability insurance to any individuals or entities
who were MICOA insureds in Nevada at the time of termination of
this Agreement.
2. If Agency enters into a subagency agreement under which the
subagency has the right to retain ownership of expirations on
business produced by the subagency, then the purchase of
expirations under subparagraph 1 above will not include the
purchase of those subagency expirations, and the purchase price
paid to Agency will not include the commissions paid for such
business produced by the subagency.
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E. AGENCY'S ERRORS AND OMISSION, AND FIDELITY & ELECTRONIC CRIME
INSURANCE
The Agency will maintain valid errors and omissions insurance, with
minimum limits of $1,000,000 per incident, and a fidelity and
electronic crime policy through an insurer, both of which shall contain
terms and limits of coverage acceptable to MICOA covering the Agency's
solicitors and each of its employees. The Agency shall provide MICOA a
copy of each policy; doing so on a regular and current basis shall be a
precondition to all of Agency's rights under this Agreement, including
but not limited to the payment of all earned commissions.
F. TERMINATION OF AGREEMENT
1. This agreement shall terminate:
a. Automatically if any public authority cancels or declines to
renew the Agency's license or Certificate of Authority.
b. Immediately if either party gives detailed written notice to
the other of alleged gross and willful misconduct, fraud or
material misrepresentation.
2. This Agreement shall terminate, subject to any automatic renewal
or extension for one year as required by law, upon either party
giving at least one hundred twenty (120) days advance written
notice to the other, if not otherwise contrary to applicable law
or this Agreement.
3. If the Agency is delinquent in either accounting or payment of
monies due MICOA, MICOA may by written notice to the Agency
immediately terminate, suspend or modify any of the provisions of
this agreement. Such action shall not be taken by MICOA over
minor differences between the records of the Agency and MICOA.
4. All supplies, including forms and policies furnished by MICOA and
any copies or other reproductions of them, shall remain the
property of MICOA and shall be returned to MICOA or its
representative upon demand.
G. INDEMNIFICATION
The respective parties shall indemnify and hold one another harmless
as follows:
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1. MICOA shall indemnify and hold Agency harmless against any MICOA
act or omission, except to the extent the Agency has caused,
compounded, or contributed to such error.
2. Agency shall indemnify and hold Agency harmless against any act
or omission of the Agency, except to the extent MICOA has caused,
compounded, or contributed to such error.
3. The Agency and MICOA shall properly notify one another upon
receiving notice of the commencement of any action related to
such liabilities. MICOA shall be entitled to participate in any
such action or in consultation with Agency and its carrier to
assume the defense of any such action. If MICOA assumes the
defense of any such action, it shall not be liable to the Agency
for any legal or other expenses subsequently incurred on the
Agency's behalf absent MICOA's advance approval of such expenses.
4. Neither party shall, except at its own risk and expense,
voluntarily assume any liability, make any payment or incur any
expense without the prior written consent of the other.
H. POTENTIAL OPPORTUNITIES
1. Other Programs. Agency and MICOA agree that Agency may be offered
the opportunity to support MICOA's workers' compensation, and its
other nonphysician professional liability or product programs in
Nevada when MICOA proceeds with related marketing plans. Such
plans may also include Agency's involvement in sales of MICOA
commercial and personal products. Appropriate agreements must be
negotiated separately from this agreement for each such product,
and for each such territory, including but not limited to Nevada.
2. Territory. Agency and MICOA further agree to consider, subject to
successful negotiation of appropriate agreements separate from
this agreement, expansion of Agencies' sales territories for
MICOA beyond Nevada.
I. MISCELLANEOUS
1. Amendment. This agreement may be amended only in writing by
mutual agreement of the Agency and MICOA, except that MICOA's
name herein shall be deemed changed automatically for purposes of
this agreement without written amendment upon approval of any
such change by MICOA's domiciliary regulator.
2. Non Waiver. Any failure by MICOA to insist upon compliance with
any provisions of this Agreement or of the rules and regulations
of MICOA shall not be construed as or constitute a waiver of them
by MICOA.
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3. Integrated Agreement. This Agreement and its attachments as
modified from time to time supersedes and replaces as of its
effective date, all previous agreements, if any, between MICOA
and the Agency. There are other agreements between MICOA and the
Agency's parent corporation, SC&W, which are not superceded.
4. Independent Contractor. The Agency is an independent insurance
Agency and independent contractor, and not an employee, manager,
officer or owner of MICOA.
5. Applicable Law. This Agreement shall be interpreted under the
laws of the State of Nevada. Any provisions of this Agreement or
any amendments to the Agreement that are or become in conflict
with any applicable statutes or regulations shall be deemed to be
amended to conform to those statutes or regulations.
6. Counterparts. This Agreement and any Exhibits which require
signatures may be executed in counterparts which shall together
be regarded as binding upon the Parties.
7. Authority. The persons signing below represent and warrant that
they are duly authorized representatives of the respective
Parties, fully willing and able to execute this Agreement.
8. Assignment. MICOA may assign this Agreement to its parent,
affiliate, or subsidiary corporations who are licensed insurers
upon written notice to Agency. Agency may not assign this
Agreement without the written permission of MICOA or its
successors or assigns.
9. Resolution of Disputes. In the event of any dispute arising out
of this Agreement, MICOA and Agency agree to submit such dispute
to arbitration as follows:
a. There shall be three arbitrators; one shall be selected by
the Agency, one shall be selected by MICOA, and a third
shall be selected by those two arbitrators. If the two
arbitrators cannot agree on the selection of a third,
American Arbitration Association's regional office closest
to Agency's main office shall be requested to appoint the
third arbitrator.
b. The determination of the arbitrators shall be final and
binding upon the Agency and MICOA
c. Neither MICOA nor the Agency shall be entitled to punitive
and/or exemplary damages.
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d. The arbitration shall be conducted in accordance with the
procedures of the above referenced regional office of the
American Arbitration Association. The Agency and MICOA shall
pay the cost of their arbitrator and share equally in the
expense of the third arbitrator.
e. Either Party, may where permitted by the law of Nevada, enter
judgment upon the arbitrators' award.
10. Year 2000 Compliance. Agency must at times assure that any of its
computers, data processing systems, software components, and
network arrangements use for MICOA business completely and
accurately, present, produce, store and calculate all dates after
December 31, 1999; and that they will not produce abnormally
ending or incorrect results involving such dates as used in any
forward or regression data based functions. All such items must
yield date-related functionalities and date fields which
accurately indicate the century and millennium and correctly
perform all calculations involving a four digit year field.
Signed and effective this 25th day of May, 1999.
AGENCY
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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Its: President
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MICOA
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, M.D.
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇, M.D.
Secretary/Treasurer
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EXHIBIT A
AGENCY AGREEMENT
SCHEDULE OF COMMISSIONS AND WRITTEN PREMIUM
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New Business Policies: 12% of the annual premium
Renewal Policies: 12% of the annual premium
Appointed agents who are not a party to a current MICOA agency contract
and/or are not affiliated with an agency which has an agency contract
will receive a 1% commission rate for all lines of business stated
above.
Commission will decrease by .5% effective 10-1-99 as part of a
repayment program under a project memorandum dated 4-7-99. This
decrease will stay in effect until SC&W reaches $10MM in premium or at
a maximum of 10 years.
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