GENERAL AGENCY AGREEMENT
THIS GENERAL AGENCY AGREEMENT (this "Agreement") is made and
entered into as of the first day of January, 1997, by and among
DORINCO REINSURANCE COMPANY, an insurance company organized under
the laws of the State of Michigan ("Reinsurer"), STATE AND COUNTY
MUTUAL FIRE INSURANCE COMPANY, an insurance company organized under
the laws of the State of Texas ("Company"), and XXXXXX GENERAL
AGENCY, INC., a corporation organized under the laws of the State
of Texas ("General Agent");
W I T N E S S E T H:
THAT, in consideration of the mutual covenants hereinafter
contained and upon the terms and conditions hereinbelow set forth,
the parties hereto agree as follows:
PREAMBLE
The Company, the Reinsurer, the General Agent and American
Hallmark General Agency, Inc. ( Program Administrator ) have
entered into that certain 100% Quota Share Reinsurance Agreement
dated as of January 1, 1997, a true and complete copy of which is
attached hereto as Exhibit A and fully incorporated herein by this
reference (the "Reinsurance Agreement"), which Reinsurance
Agreement requires the appointment of the General Agent to perform
certain specified acts on behalf of the Company and Reinsurer. The
General Agent desires to perform the functions and duties necessary
under the Reinsurance Agreement. It is therefore mutually agreed
by the parties that the General Agent will perform all functions
necessary for the production, service, management and loss
adjustment of policies issued under the Reinsurance Agreement in
accordance with the terms and conditions set forth therein and
herein. To the extent that there is any conflict between the terms
of this Agreement and the Reinsurance Agreement, the Reinsurance
Agreement shall govern. Notwithstanding any provisions to the
contrary contained elsewhere herein or in any other document, it is
expressly understood that the execution and delivery of this
Agreement and the Company's performance hereunder shall not under
any circumstances be interpreted to affect, weaken or modify the
Reinsurer's obligation to indemnify and hold the Company harmless
of all business, credit and insurance risks as set forth in the
Reinsurance Agreement. The contractual assumption by the Reinsurer
of all of these risks in the Reinsurance Agreement, along with the
contractual assumption by the Program Administrator of certain
duties under the related Administrative Services Agreement (as such
term is defined in the Reinsurance Agreement), are conditions
precedent to the Company's entering into this Agreement with the
General Agent.
ARTICLE I
APPOINTMENT AND DUTIES
1.01 The Company, at the direction of the Reinsurer, hereby
appoints the General Agent as its managing general agent for the
purpose of producing and handling the business which is the subject
of the Reinsurance Agreement issued or renewed on or after the
effective date of this Agreement. The Company, at the request of
the Reinsurer, hereby grants authority to the General Agent to
solicit, accept and receive applications for such classes of
coverage as are specified in the Reinsurance Agreement; to secure,
at its own expense, reasonable underwriting information through
reporting agencies or other appropriate sources relating to each
risk insured; to issue, renew and countersign policies,
certificates, endorsements and binders which the Company may, from
time to time, authorize to be issued, delivered, renewed and
countersigned; and to collect and receipt for the premiums thereon
and therefor; and to perform such other duties as are generally
required of agents and general agents.
1.02 All activities of the General Agent pursuant to this Agreement
shall be in strict compliance with the terms of the Reinsurance
Agreement and all rules, regulations and instructions of the
Company, including, but not limited to, all rules, instructions and
specifications included in the Company's rate manuals, rate
brochures and rate schedules.
1.03 The Company, at the Reinsurer's request, further authorizes
the General Agent to perform all acts and duties under policies of
insurance issued by the Company as would otherwise be performed by
the Company, including, but not limited to, properly sending and/or
receiving reports and notices, remitting and/or receiving monies
due from or to the Company, and adjusting and paying losses or
other claims. The Company grants to the General Agent the
authority to settle claims on behalf of the Company. However, the
maximum dollar amount of such authority per claim shall not exceed
$30,000. For claims settlement in excess of $30,000, the General
Agent may only settle such claims with prior approval of the
Company and Reinsurer. The Company retains final authority to
determine any disputes relating to claims settlement and setting of
loss reserves. In performing each of the acts mentioned above, the
General Agent shall be under the direct supervision and control of
the Reinsurer, and the Reinsurer shall be solely responsible for
the acts of the General Agent. While there are acts of the General
Agent which may be required by the State of Texas or any regulatory
agency thereof to be performed on behalf of the Company, the
Reinsurer shall remain ultimately responsible for such acts and
will indemnify and hold the Company completely harmless for any
damage, cost, liability, expense and/or loss (including attorneys'
fees and expenses) incurred by the Company as respects such acts of
the General Agent. The General Agent must send to the Company a
report, within thirty (30) days of determination, that a claim (i)
involves a coverage dispute; (ii) involves a demand in excess of
policy limits; (iii) alleges bad faith; (iv) alleges a violation of
the Texas Deceptive Trade Practices Act; or (v) alleges a violation
of the Texas Insurance Code, Article 21.21 (Unfair Competition and
Unfair Practices).
1.04 The Company, at the Reinsurer s request, authorizes the
Program Administrator to manage the claims adjustment for all
losses for policies issued hereunder. The Program Administrator is
authorized to have claims adjusted through independent claims
adjusters, subject to the supervision of the Reinsurer. The
selection of independent claims adjusters shall be subject to prior
written approval of the Reinsurer and Company. Such independent
claims adjusters are not the agents of the Company and the Company
shall be held harmless and indemnified by the Reinsurer for any
liability, claim, demand, expense and/or cost of whatever kind or
character as a result of, related to or connected with any action
or inaction of such claims adjusters.
1.05 The Company shall not be responsible for the General Agent's
expenses and costs, including, but not limited to, salaries,
bonuses, rentals, transportation facilities, clerk hire,
solicitors' fees, postage, advertising, exchange, personal license
fees, adjustment by the General Agent of losses under policies
issued by the General Agent, or any other agency expenses
whatsoever. The General Agent's sole compensation shall be the fee
agreed to by the Reinsurer and the General Agent as provided in
Section 3.01 of this Agreement.
1.06 The General Agent understands and agrees that it has no power
or authority granted to it by the Company independent of the
Reinsurance Agreement, and that this Agreement and the General
Agent's authority hereunder shall cease immediately upon
termination, for any reason, of this Agreement or of the
Reinsurance Agreement (excepting only the General Agent's
responsibilities with regard to run-off and other matters as set
forth herein or in the Reinsurance Agreement).
1.07 The General Agent shall not have the power to accept or bind
risk other than as set forth herein, as set forth in the
Reinsurance Agreement or as may be subsequently authorized by the
Company and Reinsurer in writing. The General Agent may not bind
or cede reinsurance or retrocessions on behalf of the Company, may
not commit the Company to participation in insurance or reinsurance
syndicates, and may not commit the Company to a claim settlement
with a reinsurer without the prior written approval of the Company.
If such prior written approval is given, the General Agent shall
forward promptly a report to the Company concerning such
transaction and/or payment. The Company hereby authorizes the
General Agent to collect payments for losses and loss adjustment
expenses from a reinsurer. The General Agent shall send a report
to the Company concerning such transactions promptly.
1.08 The General Agent acknowledges that this Agreement shall not
become effective until the General Agent is duly appointed by the
Company and on file with the Texas Department of Insurance. The
General Agent agrees that any producing agent receiving commission
pursuant to this Agreement shall first be duly appointed by the
Company and said appointment on file with the Texas Department of
Insurance. The General Agent further agrees to be responsible for
the payment of any penalty assessed to the Company for any
violation by the General Agent or any producing agent appointed by
the General Agent pursuant to the provisions of Article IV hereof
of any license or appointment provision of the Texas Insurance Code
or the rules and regulations promulgated thereunder. If the
General Agent fails to pay such penalty, the Reinsurer shall pay it
immediately upon notification by the Company (either orally or in
writing) of the General Agent's failure to pay such penalty.
1.09 It is understood that the Reinsurer has acknowledged that the
Company shall not be required to monitor the General Agent's
compliance with the terms of either the Reinsurance Agreement or
this Agreement and the Reinsurer shall be responsible for
monitoring the General Agent's compliance with the Reinsurance
Agreement and this Agreement.
1.10 The authority and limitations of the General Agent to issue
policies are as follows:
(a) the maximum annual premium volume the General Agent may
produce under this General Agency Agreement is $12
million;
(b) the basis of the rates charged are as provided in the
Company's rate manuals, rate brochures and rate schedules
which the General Agent shall follow;
(c) the only classes of business the General Agent is
authorized to produce and handle under this Agreement are
the classes of business specified in the Reinsurance
Agreement;
(d) the maximum limits of liability for policies to be
produced pursuant to this Agreement are set forth in the
Reinsurance Agreement;
(e) the General Agent may issue policies under this Agreement
only to insureds domiciled in the State of Texas; but
this limitation shall not apply to losses if said
policies provide coverage outside the aforesaid
territorial limit;
(f) the General Agent shall only cancel policies as set forth
in the policy form for the policies produced hereunder or
as otherwise permitted by the laws of the State of Texas;
(g) the maximum term for any policy issued hereunder shall be
twelve (12) months;
(h) the General Agent shall employ all reasonable and
appropriate measures to control and keep a record of the
issuance of the Company's insurance policies hereunder,
including, but not limited to, keeping records of policy
numbers issued and maintaining policy inventories;
(i) the excluded risks are those set forth in the Reinsurance
Agreement.
In underwriting policies, the General Agent shall follow the
underwriting guidelines developed by the General Agent, the
Reinsurer and the Company, and these guidelines are herein
incorporated by reference.
ARTICLE II
PREMIUMS
2.01 It is expressly agreed and understood that all premiums
collected by the General Agent are collected on behalf of the
Company; that such premiums are the property of the Company; and
that the General Agent has no interest in the premiums collected by
it. All premiums collected by the General Agent on the business
produced under the Reinsurance Agreement shall be deposited in a
bank account separate and apart from all other bank accounts of the
General Agent which (i) reflects ownership of the account by the
Company and (ii) is otherwise maintained in accordance with the
requirements of Article 21.07-3, Section 3C of the Texas Insurance
Code. The only disbursements from such account shall be the
payment of claims, claims expenses, return premiums and commission
due the General Agent as authorized herein and in the Reinsurance
Agreement and remittance of premiums to the Reinsurer. The General
Agent shall not make personal use of any funds in this separate
account. The commissions payable to the General Agent are debts
due to the General Agent by the Reinsurer and the privilege herein
granted of deducting commissions from said premiums should not be
taken as a waiver by the Company of its exclusive ownership rights
of premiums as provided herein. Should any dispute arise between
the Company, the Reinsurer and/or the General Agent regarding
payment of premium, the General Agent shall remit immediately all
money and property, without deductions for commissions, to the
segregated account with full reservation of any and all rights
reserved by the parties.
2.02 The General Agent shall furnish to the Company and Reinsurer
all necessary premium and loss data (in a form acceptable to the
Reinsurer and the Company) no later than forty-five (45) days
following the end of the month during which the business is written
or losses are incurred to enable the Company to record statistics
required by statutes, regulation or upon call by authorities having
competent jurisdiction. Such data shall include, but is not
limited to, premiums written and unearned premium. Said data shall
be segregated by lines of insurance and location of risk.
2.03 The keeping of an account with the General Agent on the
Company's books as a creditor and debtor account is declared a
record memorandum of business transacted and neither such keeping
of an account, nor alteration in commission rate, nor failure to
enforce prompt remittance or compromise or settlement or
declaration of balance of account, shall be held to waive assertion
of the trust relation as to premiums collected by the General
Agent.
2.04 The General Agent shall be liable for the payment of all
original and advance premiums upon all policies of insurance
written through the General Agent or any sub-agents of the General
Agent.
2.05 The General Agent shall remit to the Reinsurer any funds of or
due to the Company under this Agreement at the earlier of the
following: (1) forty-five (45) days from the end of the month in
which collected premium is recorded; or (2) ninety (90) days from
the end of the month in which the coverage under this Agreement is
issued.
2.06 The General Agent shall hold all funds of or due the Company
in a fiduciary capacity.
ARTICLE III
COMPENSATION TO THE GENERAL AGENT
3.01 The Reinsurer shall allow the General Agent in full
compensation for all services rendered and in full reimbursement
for all expenditures made by the General Agent the fee specified in
Article XI of the Reinsurance Agreement. The Reinsurer shall pay
the Company directly its ceding fee as specified in the Reinsurance
Agreement (Article X), and the amounts for assignments,
assessments, premium taxes, fines and penalties as specified in the
Reinsurance Agreement (Articles X and XIII). The General Agent
shall not be required to return, as commission or return
commission, monies greater than the total commission paid or
otherwise payable to the General Agent.
3.02 The Company shall not be liable for or responsible for any
commissions or other monies payable to the General Agent in
connection with this Agreement or the Reinsurance Agreement. The
General Agent shall not xxx or seek arbitration against the Company
for any actions by, or debts owing from, the Reinsurer.
3.03 In the event the Company or the Reinsurer, during the
continuance of this Agreement or after its termination, refunds
premiums under any policy of insurance by reasons of cancellation
or otherwise, the General Agent agrees immediately to return to the
Reinsurer the commission previously received by it on the portion
of the premium refunded.
ARTICLE IV
SUB-AGENTS
4.01 The General Agent may appoint such producing agents as shall
be reasonably approved by the Reinsurer and the Company. The
General Agent may not terminate the appointment of such agents
without the written authorization of the Company.
4.02 The General Agent and the Reinsurer shall comply with, and
shall be responsible to insure the compliance by all such producing
agents with, the terms of this Agreement and the Reinsurance
Agreement and all other written rules and regulations of the
Company, and treat as confidential and use only in the interest of
the Company all instructions, information and materials received
from the Company.
4.03 The General Agent and Reinsurer shall be solely responsible
for the performances of any producing agents under all of the terms
and provisions hereof, including, but not limited to, the
collections of premiums and refunds of premiums.
4.04 Each such producing agent must receive a Class II appointment
as an agent of the Company through the appropriate regulatory body
of Texas as provided by law, before any application shall be
accepted from him or other insurance performances on behalf of the
Company are performed. The Reinsurer and General Agent shall be
ultimately responsible for the obligation of the producing agent to
obtain a Class II appointment as provided herein. The General
Agent shall have each producing agent appointed with the Company.
4.05 It is also specified that the General Agent and the Reinsurer
shall be solely responsible for all commissions payable to any
producing agents. The Reinsurer, General Agent and any producing
agent shall not seek to hold the Company liable through litigation,
arbitration or otherwise for commissions payable to such producing
agents.
4.06 The Company, in its sole discretion with or without cause, and
without prior written notice, may terminate the appointment of any
producing agent.
ARTICLE V
ADDITIONAL DUTIES OF AGENT
5.01 The General Agent shall, at all times during the period of
this Agreement, comply with all laws of the State of Texas and all
orders, policy decisions or other requirements of the Texas
Department of Insurance.
5.02 All books, records, accounts, documents and correspondence of
the General Agent and any producing agent pertaining to the
Company's and Reinsurer's business shall, at all times, be open to
examination by any authorized representative of the Company,
Reinsurer or Program Administrator. The General Agent shall make
copies of records available upon request by the Company, Reinsurer
or Program Administrator, whether such request is before or after
termination of this Agreement or the Reinsurance Agreement. The
General Agent must maintain separate records of business,
including, but not limited to, underwriting files for each insurer
for whom it acts as a general agent pursuant to the Texas Insurance
Code, Article 21.07-3, Section 3C(b) or any amendment or successor
thereto. Such records must be maintained for five (5) years or
until the completion of a financial examination by the insurance
department of the state in which the Company is domiciled,
whichever is longer.
5.03 The General Agent shall maintain adequate accounting
procedures and systems, at no cost or expense to the Company, and
shall provide statistics in a timely manner for all reporting
requirements under the Reinsurance Agreement or as shall be
required from time to time by the regulatory authorities of the
State of Texas or any other governmental agency or authority. Such
statistical information shall be provided to the Company by the
General Agent at the General Agent's sole cost and expense.
5.04 The General Agent shall forward to the Company and Program
Administrator, no later than forty-five (45) days from the close of
the month being accounted for, a report in detail of all policies
of insurance written or placed, or liability increased or
decreased, or policies continued or renewed or canceled by or
through the General Agent during the month being accounted for,
which shall include all premiums due thereon whether collected or
not. Such report shall show the net amount due to the Company and
Reinsurer on all such business on the lines of business authorized
to be written by the General Agent and the amounts paid in losses,
loss adjustment expenses and commissions. Such report shall also
include, to the extent not already included, both insurance and
reinsurance transactions and all transactions pursuant to Texas
Insurance Code, Article 21.07-3, Section 3C(a) including:
(i) statement of written, earned and unearned premiums;
(ii) losses and loss expenses outstanding;
(iii) losses incurred but not reported; and
(iv) any management fees.
The report shall be received by or confirmed to the Company no
later than forty-five (45) days from the close of the month for
which business is reported. The Company shall maintain such
account reports on file for at least three (3) years and shall make
the account reports available to the Commissioner of Insurance of
the State of Texas (the "Commissioner") for review upon request.
5.05 The General Agent shall account for and furnish to the
Company, upon request, complete copies of all policies issued,
copies of all spoiled, voided or otherwise unissued policies, and
copies of all claim files created with respect to all loss
occurrences under any policy issued under this Agreement.
5.06 The title of all undelivered policies, books, supplies, or
other property related to the reinsured business is in the Company,
and these shall be delivered to the Company by the General Agent
immediately upon the termination of this Agreement. The General
Agent agrees to surrender peaceably the same without compelling the
Company to resort to any legal proceedings whatsoever.
5.07 The General Agent shall not insert any advertisement
respecting the Company or the business to be written under this
Agreement and/or the Reinsurance Agreement in any publication or
issue any circular or paper referring to the Company or such
business without first obtaining the written consent of the
Company. The General Agent shall establish and maintain records of
any such advertising as required by Texas statute and regulation.
5.08 The General Agent shall maintain on behalf of the Company and
Reinsurer complete copies of all policies issued hereunder and
copies of all claim files created with respect to all loss
occurrences thereunder. Any or all policies and/or claim files
required to be maintained by General Agent pursuant to this Section
5.08 may be maintained in electronic data storage form accessible
by computer and if so stored in this fashion, no physical copy of
such items need be maintained. Where electronic claims files are
maintained by the General Agent, any data from such files requested
or required by the Company shall be provided within thirty (30)
days or less if so requested by the Company.
5.09 The General Agent shall pay to the Reinsurer the positive
balance, if any, no later than forty-five (45) days following the
end of the month during which the business was written, of net
collected premiums hereunder (being defined as premiums collected
less return premiums) less the General Agent's commissions and less
loss adjustment expenses and loss payments. Should such balance be
a negative amount, the Reinsurer shall promptly pay the General
Agent upon receipt and verification of the amount due as reported
by the General Agent.
5.10 The General Agent shall be solely responsible for procuring
and renewal, extension, or new policy or insurance that may be
required by any state or rule or regulation of any State Insurance
Department with respect to policies originally written directly for
the Company. The General Agent and Reinsurer shall indemnify the
Company and hold it harmless from any loss, damage, cost, claim or
expense whatsoever that the Company may incur, or for which it may
become liable, as a result of the said General Agent's failure,
refusal or neglect to fulfill said responsibility.
5.11 The General Agent agrees that its duties and obligations under
this Agreement shall be due and owing also to the Company's and
Reinsurer's successors and assigns.
5.12 Nothing in this Article V shall be construed as requiring the
Company to monitor the book of business which is the subject of the
Reinsurance Agreement for the benefit of the Reinsurer.
5.13 At no expense to the Company, the Company shall conduct or
cause to be conducted a semi-annual examination of the General
Agent, in compliance with 28 TAC Sec. 19.1204(b)(19). Furthermore, if
the Company's aggregate premium volume increases by thirty (30)
percent in any thirty (30) day period, at no expense to the
Company, the Company shall examine or cause to be examined within
ninety (90) days the General Agent if it writes more than twenty
(20) percent of the Company's volume and has also experienced a
twenty (20) percent increase in premium volume during that same
thirty (30) day period in compliance with 28 TAC Sec. 19.1204(b)(19).
The examinations required under the preceding paragraph shall
adequately provide the Commissioner with the information outlined
in (a) through (e) below, shall be made available to the
Commissioner for review, shall remain on file with the Company for
a minimum of three (3) years and shall, at a minimum, contain
information concerning the following:
(a) claims procedures of the General Agent;
(b) timeliness of claims payments by the General Agent
(i.e., lag time between date claim is reported and date
claim is paid);
(c) timeliness of premium reporting and collection by the
General Agent;
(d) compliance by the General Agent with underwriting
guidelines under Section 1.10 hereof; and
(e) reconciliation of policy inventory.
5.14 The General Agent shall return any unearned premium due
insureds or other persons on the business which is the subject of
the Reinsurance Agreement; if for any reason, the General Agent
does not return such unearned premium, then the Reinsurer shall pay
such amount and/or amounts.
5.15 The General Agent shall be duly licensed as a managing general
agent as required under Texas law.
5.16 Should the Texas Department of Insurance make a request to the
Company for any data required to comply with a statistical plan
and/or data call, the General Agent shall be solely responsible to
provide the Company with such data. Should the request from the
Texas Department of Insurance require the Company to contract the
services of an outside source, such as an actuarial firm, to
compile the data required, the General Agent shall be responsible
for its proportionate share of the total cost for services
rendered.
ARTICLE VI
TERM AND TERMINATION
6.01 The effective date of this Agency Agreement is 12:01 a.m.,
Central Standard Time, on January 1, 1997, and shall remain
continuously in force unless canceled as follows:
(a) This Agreement may be canceled by any party giving at
least ninety (90) days prior written notice to the other
parties. Notice shall be provided by registered mail,
return receipt requested, and notice shall be deemed to
have been provided on the date of mailing.
(b) Immediately by mutual consent of the Company and
Reinsurer.
(c) At any time, by the Company, without prior notice in the
event of any other party declaring bankruptcy or being
declared or found bankrupt or insolvent, or being the
subject of a cease and desist order, corrective order, or
being placed in, or subject to, a proceeding of
supervision, conservation, rehabilitation or liquidation.
(d) Automatically and Immediately in the event of the
cancellation or non-renewal of the General Agent's
license or certificate of authority issued by the Texas
Department of Insurance.
(e) Immediately upon written notice by the Company, if the
Reinsurer or General Agent is found to be insolvent by a
State Insurance Department or court of competent
jurisdiction, or is placed in supervision, conservation,
rehabilitation, or liquidation, or has a receiver or
supervisor appointed. By the Reinsurer, upon thirty (30)
days written notice, if the Company or General Agent is
found to be insolvent by a State Insurance Department or
court of competent jurisdiction, or is placed in
supervision, conservation, rehabilitation or liquidation,
or has a receiver or supervisor appointed.
(f) If the General Agent shall default in making remittance
for net premiums then this Agreement shall be terminated
according to the terms provided in Section 5.02(d) of the
Reinsurance Agreement.
(g) If the General Agent shall defraud or attempt to defraud
the Company; or any policyholder, then the Company may
at its sole discretion cancel this contract by giving the
General Agent written notice of cancellation served
personally or by mail, which shall be effective
immediately.
(h) Automatically and immediately, without notice upon
cancellation or termination of the Reinsurance Agreement,
including, but not limited to, termination of the
Reinsurance Agreement by the Company as provided in
Section 5.02(f) of the Reinsurance Agreement.
(i) As provided in Section 9.11 of this Agreement.
6.02 It is expressly agreed and understood that nothing in this
paragraph authorizes the General Agent to write any new business
under this Agreement should the Reinsurance Agreement terminate,
except the business that is required to be renewed or issued
because of applicable law or regulation, as provided in Article V
of the Reinsurance Agreement (any such business which is issued
because of the requirements of law or regulation is 100% reinsured
under the Reinsurance Agreement, as provided in Article V of the
Reinsurance Agreement).
6.03 The Company shall have no liability to the General Agent
and/or Reinsurer by virtue of the Company's termination of this
Agreement as set forth in this Article; it being expressly
understood that partial consideration for the Company's grant of
agency authority to the General Agent is the General Agent's and
Reinsurer's promise that the Company shall not be responsible for
any damages which might arise by virtue of any termination of this
Agreement.
6.04 In the event of termination of this Agreement, after the
General Agent having promptly accounted for and paid over premiums
for which it may be liable, the General Agent's records, use and
control of expirations shall remain the property of the General
Agent and left in its undisputed possession.
6.05 In the event that this Agreement is terminated, the General
Agent, for no additional fee, shall have the authority (unless
revoked by the Company at its sole discretion in which case the
Reinsurer shall appoint a successor at no cost to the Company) as
provided in this Agreement to continue to perform all of its duties
under this Agreement on the remaining policies during the run-off
period. The General Agent's duties during the run-off period shall
include handling and servicing of all policies through their
natural expiration, together with any policy renewals required to
be made by the provisions of applicable law, whether or not the
effective date of such renewal is subsequent to the effective date
of cancellation of this Agreement. Further, upon termination of
this Agreement, the General Agent shall not be relieved of or
released from any obligation created by or under this Agreement in
relation to payment, expenses, reports, accounting or handling,
which relate to the outstanding insurance business under this
Agreement existing on the date of such termination. The Company,
General Agent and Reinsurer will cooperate in handling all such
business until the business has expired either by cancellation or
by the terms of the policies and all outstanding losses and loss
adjustment expenses have been settled.
6.06 As the Reinsurance Agreement provides for termination on a
run-off basis, the relevant provisions of this Agreement shall
apply to business being run-off. It is also expressly agreed that
the terms, conditions and obligations of the Preamble and Articles
II, IV and V, Sections 6.03, 6.04, 6.05, 6.06 and 6.07, Articles
VII and VIII, and Section 9.11 herein shall survive termination of
this Agreement.
6.07 The Company may suspend the authority of the General Agent
during the pendency of any dispute regarding any event of default
by the General Agent.
ARTICLE VII
T.B.A. INSURANCE, INC.
The Company has contracted with T.B.A. Insurance, Inc. ("TBA")
to perform certain duties on the Company's behalf and to issue
certain checks on behalf of the Company in exchange for certain
fees. The General Agent and Reinsurer agree that TBA is to bear no
business, credit or insurance risk and no liability whatsoever to
the General Agent. TBA shall be and is hereby granted all
protections from, and indemnities against, all liabilities which
are contained herein for the benefit of the Company.
ARTICLE VIII
HOLD HARMLESS AND INDEMNIFICATION
The General Agent agrees to and does hereby indemnify and hold
the Company harmless from and against any and all actions, causes
of actions, suits, arbitrations, or proceedings of any kind,
liabilities, losses, claims, damages, costs, or expenses (including
attorneys' fees and expenses), incurred by the Company by reason
of, arising out of, or relating in any way to this Agreement or any
action taken or inaction by the General Agent in breach of the
terms of this Agreement or the terms of the Reinsurance Agreement,
or which is not in full compliance therewith. If the General Agent
does not indemnify and hold the Company harmless as provided in
this Article VIII, the Reinsurer shall fulfill the obligations of
the General Agent and make the payments required of the General
Agent pursuant to this Article VIII.
ARTICLE IX
MISCELLANEOUS
9.01 This Agreement has been made and entered into in the State of
Texas and shall be governed by and construed in accordance with the
laws of the State of Texas.
9.02 This Agreement shall be binding upon the parties hereto,
together with their respective successors and permitted assigns.
9.03 This Agreement is not exclusive and the Company reserves the
right to appoint other agents in the territory covered by this
Agreement and the General Agent reserves the right to act as
General Agent for other insurers or reinsurers.
9.04 The Company shall have no right of control over the General
Agent as to time, means or manner of the General Agent's conduct
within the terms of the Agreement and the Reinsurance Agreement and
the authority herein granted and nothing herein is intended or
shall be deemed to constitute the General Agent an employee or
servant of the Company. The General Agent shall at all times be an
independent contractor.
9.05 This Agreement shall be deemed performable at the Company's
administrative office in Fort Worth, Texas, and it is agreed that
the venue of any controversy arising out of this Agreement, or for
the breach thereof, shall be in Dallas County, Texas.
9.06 Neither the Reinsurer nor the General Agent shall assign any
of its rights or obligations under this Agreement without the prior
written consent of the Company. No verbal modification will be
recognized by any party hereto and this Agreement cannot be
modified by any subsequent practices or course of dealing by the
parties inconsistent herewith. If the Company, the General Agent
or Reinsurer shall fail to take advantage of a breach, if any, by
another party of the terms, conditions, covenants, or any of them
herein contained, such failure shall not be deemed to constitute,
or be construed as, a waiver of any rights on the part of the
General Agent, Company or Reinsurer to thereafter enforce any of
the said terms, conditions or covenants.
9.07 This Agreement may be amended, modified or supplemented only
by a written instrument executed by all parties hereto. All such
amendments or changes shall specify the effective date of such
amendments or changes.
9.08 This Agreement supersedes any and all provisions, terms and/or
conditions of any other general agency agreements, whether oral or
written, by between and among the parties.
9.09 The General Agent shall notify the Company in writing within
thirty (30) days when there is a change in the ownership of 10% or
more of the outstanding stock in the General Agent or when there is
any change in the General Agent's principal officers or directors.
9.10 The General Agent shall not offset balances due under this
Agreement against balances due or owing under any other contract.
9.11 This Agreement shall be interpreted in conformance with
applicable Texas law and regulation. If it is found or ordered by
a court or regulatory body that any provision or term of this
Agreement does not conform to such law or regulation then this
Agreement shall be deemed to be amended, and modified to be in
accordance with such law. However, where this Agreement is found
not to comply with applicable law or regulations, the Company may
in its sole discretion terminate this Agreement immediately and
without prior notice.
IN WITNESS WHEREOF, the Parties hereto by their respective
duly authorized representatives have executed this Agreement as of
the date first above mentioned.
DATED: STATE AND COUNTY MUTUAL FIRE
INSURANCE COMPANY
BY:
ITS:
DATED: XXXXXX GENERAL AGENCY, INC.
BY:
ITS:
DATED: DORINCO REINSURANCE COMPANY
BY:
ITS:
