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EXHIBIT 10.22
PRODUCER AGREEMENT - #MAUMR10011
AMERICAN UNDERWRITING MANAGERS AGENCY, INC., GLEN ALLEN, VIRGINIA, hereinafter
designated as Manager, and
FINANCIAL PACIFIC INSURANCE AGENCY, INC.
SACRAMENTO, CALIFORNIA
hereafter designated as Producer, pursuant to the Producer's request for
underwriting facilities and other services of the Manager, agree as follows:
This Agreement shall become effective on the 1st day of October, 1995.
Whereas the Manager is organized for the purpose of underwriting risks of
insurance under contract, for insurance companies, subject to the statutes of
the various states of the United States of America where such business is
domiciled; and
Whereas the Producer (subject to restrictions imposed upon the Producer by law
in the state(s) in which the Producer is authorized to write) is desirous of
placing contracts of insurance for insureds or principals named in such
contracts of insurance:
1. OWNERSHIP OF THE BUSINESS
The Manager expressly recognizes the independent ownership by the Producer
of the insurance business covered by this Agreement and agrees in the event
of termination of this Agreement, the Producer having promptly accounted
for an paid over premiums for which he is liable, the Producer's records,
use and control of these expirations, shall remain the property of the
Producer, and be left in his undisputed possession; the Manager's record or
knowledge of names of insureds and expiration dates shall not be referred
or communicated by the Manager to any other agent or Producer or person.
If the Producer has not properly accounted for and paid all premiums due to
the Manager in accordance with the payment terms of this Agreement, the
ownership and control of the Producer's expirations shall be vested in the
Manager. If the Manager assumes control of the Producer's expirations, the
Manager shall have the sole right to use and control such expirations and
commissions, if any, received by the Manager from the expirations, less
applicable expenses, will be credited against balances due the Manager from
the Producer. Upon payment of any settlement of outstanding balances,
expirations will revert to Producer. If the Producer furnishes collateral
that is acceptable to the Manager in the amount of the balances due the
Manager from the Producer, the expirations will remain with the Producer.
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2. BINDING AUTHORITY
Unless added by Addendum, the Producer has no authority, either in his own
name or in the name of the Manager, or any companies for which the Manager
is providing underwriting services, to make, alter, bind or discharge any
contract of insurance.
3 COMMISSIONS
The Manager shall pay the Producer as commission, a percentage rate of the
premium on each license bond written and paid for under this Agreement, at
the rate of commission from time to time as agreed to by the Manager and
Producer. Return commissions shall be credited at the same rate on any
return premiums.
4. REVISION OF AGREEMENT
This Agreement may be revised by the Manager after it gives the Producer at
least sixty (60) days written advance notice of the proposed revision and
the effective date. Such notice will be communicated by the Manager to the
Producer in writing and will provide an opportunity to discuss the
revisions and reasons for such changes.
5. CANCELLATION OF INSURANCE
Nothing in the Agreement shall be construed as limiting or restricting the
right of the Manager to cancel any binder, policy or contract.
The Producer is authorized to cancel on behalf of the Manager or any
company for which the Manager is providing underwriting services, any
contracts, certificates, binders or policies of insurance that they have
issued or caused to be issued for the Manager.
6. ACCOUNTING AND REMITTANCE
A. All business received by the Producer must be reported to the Manager
within 10 calendar days of each month-end in which the bond becomes
effective. Premiums, net of commissions are to be remitted, to the
Manager no later than 20 days after each month-end.
The Producer hereby guarantees all premiums due the Company on all
insurances effective under this Agreement or any Addendum to this
Agreement. The Producer shall be liable for earned premium whether or
not collected from the insured.
D. Until the Producer receives written notice to the contrary, he shall
remit all accounts and premium to American Underwriting Managers,
Inc., ▇.▇. ▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇.
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7. EXPENSES
The Manager shall not be responsible for any Producer's expenses
whatsoever.
8. SUPPLIES
All supplies furnished to the Producer by the Manager shall always remain
the property of the Manager and shall be returned to the Manager or its
representative promptly upon demand.
9. CLAIMS
The Producer agrees to cooperate fully with the Manager to facilitate the
investigation, adjustment, settlement and payment of any claim when and as
requested by the Manager, and under any rules or regulations as may be
agreed upon from time to time.
10. ADVERTISING
The Producer shall not limit any advertisement referring to the Manager or
any company for which the Manager is providing underwriting services, or
issue or cause to have issued any circular, letter, pamphlet or other
publication or statement referring to the Manager or any company for which
the Manager is providing underwriting services without the express written
consent of the Manager. In the event the Manager or any company for which
the Manager is providing underwriting services shall be subject to loss or
expense arising out of any unauthorized advertisement, statement or
publication of the Producer, the Producer shall be liable for all resulting
damages and costs.
11. TERMINATION OF AGREEMENT
This Agreement supersedes all previous Agreements, whether oral or written,
between the Manager and the Producer.
This Agreement may be canceled at any time by either party giving ninety
(90) days written notice to the other. After the date of cancellation of
this Agreement, unless otherwise stipulated at the option of the Manager,
the Producer shall complete the collection and account to the Manager for
all premiums, commissions and other transactions unaccounted for on the
date of cancellation or arising thereafter in respect to outstanding
insurances.
In case the Manager shall find it necessary to perform any duty otherwise
required of the Producer under this Agreement, the Producer shall be liable
for all cost incidental thereto.
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12. UNDERWRITING MANAGER
This Agreement pertains only to business written through AMERICAN
UNDERWRITING MANAGERS AGENCY, INCORPORATED, underwriting Managers, for the
insurance company(ies) as shown below:
▇▇▇▇▇▇ AMERICAN INSURANCE COMPANY
▇▇▇▇▇▇ INSURANCE COMPANY
who has the authority to act for the company(ies) in all matters pertaining
to this Agreement;
13. ASSIGNMENT
This Agreement shall not be transferred or assigned by either party,
without the prior written consent of the other.
14. DOUBLE BROKERING
The writing of business produced by another wholesaler or surplus fines
general agent, through the Producer, is not permitted without the prior
consent of the Manager, and may be considered as grounds for the immediate
termination of this Agreement.
15. CONFORMITY OF STATUTE
Terms of the Agreement which are in conflict with the statutes of the state
wherein this Agreement applies are hereby amended to conform to such
applicable statutes.
16. APPLICABLE LAW
The law applicable to this Agreement shall be the law of the Commonwealth
of Virginia.
17. ARTICLE VII, ARBITRATION
A. In the event of a conflict or dispute hereunder which cannot be
amicably settled between the parties, such dispute shall be submitted
to arbitration. The Manager and the Producer shall each nominate an
arbiter and the two named arbiters shall then select an umpire. The
arbiters and umpire shall be disinterested persons familiar with the
insurance business. Each party shall submit its case to its arbiter
within 30 days of the decision to refer to arbitration. Should either
party fail to name its arbiter
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within 30 days of the date it is requested to do so, that arbiter
shall be appointed by the Bureau of Insurance of the State of
Virginia.
B. The arbiter shall consider the dispute and shall submit any issues
upon which they disagree to the umpire. The umpire's written decision
thereon shall be binding upon the parties. The arbiters and umpire
shall be relieved from judicial formalities and may abstain from
following strict rules of evidence, interpreting this Agreement as an
honorable engagement and not merely as a legal obligation. The
procedural laws of the Commonwealth of Virginia shall govern the
interpretation and application of this Agreement and the enforcement
of the arbitration award. The venue of the arbitration shall be in
Richmond, Virginia and each party shall pay the fee of its own arbiter
and half the fee of the umpire. The remaining costs of the arbitration
shall be paid as the arbiters or umpire shall direct.
C. In the event of any actions or proceeding subsequent to the
arbitration to enforce any rights under this Agreement, the prevailing
party shall be entitled to recover its reasonable attorneys' fees.
IN WITNESS WHEREOF the Manager and the Producer have executed this Agreement
this 1st day of October, 1995.
WITNESS AMERICAN UNDERWRITING MANAGERS,
AGENCY, INCORPORATED
BY /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
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▇▇▇▇ ▇. ▇▇▇▇▇▇, President
FINANCIAL PACIFIC INSURANCE AGENCY, INC.
/s/ ▇▇▇ ▇▇▇▇▇▇▇
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▇▇▇ ▇▇▇▇▇▇▇
BY /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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Addendum No. 1 to
Agreement No. MAUMR10011 between
AMERICAN UNDERWRITING MANAGERS AGENCY, INCORPORATED
(Hereafter called the Manager)
and
FINANCIAL PACIFIC INSURANCE AGENCY, INC.
(Hereafter called the Producer)
Effective October 1, 1995, the following Addendum is hereby added to and made a
part of this Agreement:
BINDING AUTHORITY
The Producer is hereby authorized to bind and issue policies on behalf of the
Manager for the Company(ies) as specified below. The Producer agrees to adhere
strictly to the authority provided and acknowledges that any written or implied
authority granted may only be exercised by the individual(s) designated below
and shall not be delegated to any other person, firm or corporation, other than
the Producer's own underwriters.
Designated individual(s):
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
The Producer may bind and issue policies in the following company(ies), subject
to any special conditions indicated:
Company(ies): ▇▇▇▇▇▇ AMERICAN INSURANCE COMPANY
▇▇▇▇▇▇ INSURANCE COMPANY
In addition to the other terms and conditions shown in this Addendum, special
conditions apply as indicated:
Special Conditions: Authority is granted only to license and permit bond
products of a class and in those states authorized in writing, by the manager.
1. INCEPTION AND PERIOD OF INSURANCE
Any policy bound under this Addendum shall become effective during the
currency of this Addendum and in no case shall any risk be bound for a
period of greater than 30 days, unless prior approval is obtained from the
Manager.
All certificates issued under this Addendum shall become effective during
the currency of this Addendum and in no case shall any policy be issued for
a period greater than 36 months, unless prior approval is obtained from the
Manager.
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2. TERRITORIAL LIMITATION
All insurance bound shall be domiciled or located within the United States
of America subject to the following exceptions: As file approved and
authorized from time to time by the Manager.
3. CANCELLATION OF INSURANCE
A. All policies bound hereunder shall include an appropriate Cancellation
Clause with a maximum period of written notice to the Insured not to
exceed 30 days required to effect cancellation, unless otherwise
required by statute and approved in advance by the Manager.
B. The Manager shall have the right any time to cancel any insurance
bound under this Addendum, The Producer shall return to the Manager
legal evidence of all cancellations.
4. INSPECTIONS AND AUDITS
A. The Producer shall maintain policy and certificate files for each
issued policy and certificate, in a fashion agreed to by the Manager
and the Producer. These policy files should be available for audit
from time to time, by the Manager, at the premises of the Producer.
B. The Manager or its duly authorized representatives may inspect or
audit any insurance bound or the subject matter thereof
C. The Producer shall be responsible for the prompt adjustment of any
auditable insurance bound under this Addendum and for reporting to the
Manager any additional and/or return premium which may become due as a
result of such adjustment.
5. SPECIAL CONDITIONS
This Addendum will continue in force until terminated:
1. By either party upon written notice to the other party.
2. By termination of the Producer Agreement.
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IN WITNESS WHEREOF the Manager and the Producer have executed this Addendum this
1st DAY of October, 1995.
WITNESS AMERICAN UNDERWRITING MANAGERS
AGENCY, INCORPORATED
BY /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
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▇▇▇▇ ▇. ▇▇▇▇▇▇, President
FINANCIAL PACIFIC INSURANCE AGENCY, INC.
/s/ ▇▇▇ ▇▇▇▇▇▇▇
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▇▇▇ ▇▇▇▇▇▇▇
BY /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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Addendum No. 3 to
Agreement No. MAUMR10011 between
AMERICAN UNDERWRITING MANAGER, INCORPORATED
(Hereafter called the Manager)
and
FINANCIAL PACIFIC INSURANCE AGENCY, INC.
(Hereafter called the Producer)
LICENSE & PERMIT BOND
CONTINGENCY COMMISSION PLAN ADDENDUM
Effective October 1, 1995, the following Addendum is hereby added to and made a
part of this Agreement:
1. REPORTING OF RESULTS
Within 90 days after December 31, 1996 ("Accounting Date"), Company shall render
an accounting for the calendar year ended the previous December 31 (subject
year) to the Producer reflecting the experience on an earned premium basis for
premiums written under this Agreement, showing the following:
A. Subject period's earned premiums.
B. Subject period's incurred losses (as defined below).
C. Development for periods before subject period.
2. SUBJECT PERI0D INCURRED LOSSES DEFINED
Subject Period Incurred Losses shall be defined as the total amount of all
claims paid, plus all Manager allocated claim expenses (legal fees,
investigation fees, court costs, et cetera), plus Claim Reserves (which includes
claim reported and unpaid, and continuing claims determined in accordance with
the Manager's normal accounting practice) for the subject year period premium.
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3. CONTINGENT COMMISSION CRITERIA
The threshold for calculating the Contingent Commission shall be a loss ratio
below that determined according to the following calculation: A Written Premium
Volume greater than $1,000,000 in the preceding 12 months is required.
Contingency Commission Threshold Calculation
100% Net Earned Premium Volume
-57% Commission attributable to the Producer
-12% Attributable to the Manager
-X% Premium Tax
-X% All commissions and fees payable to any resident agents,
etc., as agreed to between the Producer and the Manager
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Difference = Contingent Commission Threshold
4. CONTINGENT COMMISSION CALCULATION
a. The current period loss ratio shall be calculated by dividing the
subject period incurred losses as defined in Section 2, by the earned
premium for the subject period.
The contingent commission will be equal to the contingent commission
threshold minus the actual loss ratio, divided by 2 and multiplied by
the subject period earned premium.
If the result of this calculation is positive, the amount will be paid
90 days after the end of the subject period. If the result is
negative, the negative amount will be carried forward into the
calculation of the subsequent period contingent commission.
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b. Each period's calculation will, be updated annually. The payment
amount due will be adjusted if there has been any development, either
positive or negative. In the event that a given period has had
negative development resulting in a total due amount lower than the
amount already paid, that overpayment will be deducted from the
payment due for other periods until it has been recovered. If there
are not sufficient payments due in the correct period's payments to
offset the overpayment, there will be no payment made to the Producer
for that period. The negative amount will be carried forward to the
next period and subtracted from any amounts that otherwise become
payable to the Producer under the aforesaid formula until all
overpayments are recovered.
IN WITNESS WHEREOF the Manager and the Producer have executed this
addendum this 1st day of October, 1995.
WITNESS AMERICAN UNDERWRITING MANAGERS, INC.
[SIG] BY /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
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▇▇▇▇ ▇. ▇▇▇▇▇▇, President
FINANCIAL PACIFIC
INSURANCE AGENCY, INC.
/s/ ▇▇▇ ▇▇▇▇▇▇▇ /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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