Exhibit 6.05
ALLSTATE CLUSTER
AGENCY AGREEMENT
This Agency Agreement (herein referred to as "Agreement") is between ALLSTATE
INSURANCE COMPANY and such affiliates and subsidiaries as are named on the
bottom of this Agreement, (herein referred to as "the Company") and BROOKE
CORPORATION County of OKLAHOMA State of OKLAHOMA (herein referred to as "the
Agent").
I. AUTHORITY OF AGENT
A. The Agent is an independent contractor and not an employee of the
Company, and shall have full control of his time, the conduct of his
agency and the selection of companies he will represent.
B. The Agent is authorized on behalf of the Company, during the term of
this Agreement, to receive and accept, subject to such restrictions on
binding authority as may be established by the Company, proposals for
insurance covering such classes of risks located in the state(s) of
Oklahoma as the Company may from time to time authorize to be written.
C. The Agent is authorized to solicit and sell memberships in the Allstate
Motor Club, Inc. and to solicit and sell finance products and services
available through the Allstate Financing Program.
D. The Agent agrees to comply with all laws and regulations affecting his
operation and to maintain his qualifications for licensing as an agent
by the appropriate authorities.
E. The Agent shall transmit copies of all evidence of insurance,
applications, binders, copies of policies and endorsements issued, or
otherwise notify the Company of all liability accepted not later than
the third business day following inception of coverage.
II. COMPENSATION
A. The Company will pay the Agent commissions on "net written premium" (as
defined in the Compensation Section of the U.S. Independent Agents'
Manual) in accordance with the Commission Schedule furnished by the
Company which appears as Attachment A and is a part of this Agreement,
and all applicable rules and procedures relating to compensation
established by the Company. No reduction in any rate of commission as
specified on the Commission Schedule shall be effective until the
Company has given the Agent at least ninety (90) days notice of any
proposed reduction in such rate of commission.
B. The Agent agrees to promptly return, upon demand by the Company, any
commissions which have been paid to the Agent by the Company on any
premiums which are refunded to the policyholder or for which the
policyholder receives credit or which are uncollectible regardless of
whether such commissions are paid before or after the
termination of this Agreement. The Company reserves the right to make
deductions from future payable commissions in the event that the Agent
does not promptly return any unearned commissions pursuant to this
Section.
C. Compensation rules covering special situations, conflicting
compensation interests of two or more Agents and other determinations
relative to an Agent's compensation are covered in the Compensation
Section of the U. S. Independent Agents' Manual. It is the Company's
intent that the Agent will have continuing compensation interest and
the use and control of expirations only with respect to lines of
insurance of which he is the "Originating Agent" as defined in the
Compensation Section of the U.S. Independent Agents' Agency Manual.
D. The Company shall not be responsible for any expenses incurred by the
Agent, whether on his own behalf or on behalf of the Company unless
previously authorized by the Company in writing.
E. In the event of the termination of this Agreement, commissions on
outstanding life insurance policies or annuity contracts will be
payable only on the net written premium recorded in the Agent's account
within twenty-four (24) months following such termination.
III. OWNERSHIP OF EXPIRATIONS
A. Except with respect to, life insurance and annuities, the Agent's
records and the use and control of expirations shall remain in the
undisputed possession and ownership of the Agent in the event of
termination of this Agreement, except as set forth in Paragraph C.
below.
B. Unless authorized by the Agent or required by law, the Company will not
use, or permit the use of, its records of business placed by the Agent
with the Company to solicit policyholders for the sale of other lines
of insurance or other products or services which shall abridge the
Agent's rights of ownership, use and control.
C. In the event of termination of this Agreement, if the Agent has not
then properly accounted for and paid all premiums to the Company for
which he is liable, then the use and control of expirations including
all right, title and interest in and to the records thereof shall be
vested in the Company as of the date of such termination.
D. In the exercise of its right to collect any indebtedness due from the
Agent through the use and control of such expirations, the Company
shall use reasonable business judgment in selling such expirations and
shall be accountable to the Agent for any sums received which, net of
expenses, exceed the amount of indebtedness. The Agent shall remain
liable for the excess of the indebtedness over the sums received by the
Company. Any indebtedness due from the Agent shall not prevent
application of the "Ownership of Expirations" provision in favor of the
Agent if the Agent furnishes collateral security
acceptable to the Company in the amount of such indebtedness to be held
by the Company until the indebtedness is satisfied.
E. Nothing in this Section shall interfere with the Company's obligation
to renew policies containing contractual renewal guarantees which must
be renewed pursuant to state law, regulation or by order of government
authority.
IV. INDEMNIFICATION
A. The Company will defend and indemnity the Agent against liability,
including the cost of defense and settlements, imposed on him by law
(including the Fair Credit Reporting Act) for damages sustained by
policyholders and caused by acts or omissions of the Company, provided
the Agent has not caused or contributed to such liability by his own
acts or omissions. The Agent agrees, as a condition to such
indemnification, to notify the Company promptly of any claim or suit
against him and to allow the Company to make such investigation,
settlement or defense thereof as the Company deems prudent. The Company
reserves the right to select counsel to represent the Agent in any such
action. The Agent also agrees to cooperate fully with the Company in
any such investigation, settlement of defense.
B. The Agent will indemnity the Company against liability, including the
cost of defense and settlements, imposed on the Company by law for
damages sustained by any person and caused by acts or omissions of the
Agent, other than those acts or omissions taken on behalf of the
Company, provided that the Company has not caused or contributed to
cause such liability by its acts or omissions. The Company agrees, as a
condition to such indemnification, to notify the Agent promptly of any
claim or suit against the Company and to allow the Agent to make such
investigation or settlement as the Agent deems prudent. The Company
agrees to cooperate fully with the Agent in any such investigation or
settlement. The Company reserves the right to select counsel to
represent it in any such action and to make such investigation or
settlement as the Company deems prudent.
C. The Agent agrees to obtain and maintain during the term of this
Agreement and for two years after its termination, at the Agent's sole
expense, professional liability insurance (agents errors and omissions
coverage). Such insurance must be adequate to protect against all
expenses, claims, actions, liabilities, and losses related to the
subjects covered by the required policies with limits of at least $1
million per claim with a retroactive date on or before the effective
date of this Agreement. In the event that such insurance policy is
materially changed or canceled, the Agent agrees to notify the Company
in writing immediately upon receiving notice of such change or
cancellation.
D. The Agent must furnish the Company with proof of professional liability
insurance upon request by the Company. If upon receipt of such request
the Agent does not furnish evidence of acceptable coverage within 30
days, the Company will have the right to terminate the Agreement for
cause in accordance with section IX. A. 3. of this Agreement.
V. BUSINESS PROCEDURES
All business placed by the Agent with the Company will be direct billed business
and the following procedures will apply,
A. The completed application together with the initial premium (without
deduction of commission) shall be submitted to the Company in
accordance with the provisions of the Company's direct xxxx program.
B. The Company will be responsible for all premium billing and collection.
If the Agent collects any premiums on Company billed business, he will
promptly account therefor and transmit to the Company, when and as
directed by the Company, the full amount without making any deduction
for any purpose.
C. All accounting records of the Agent pertaining to the business of the
Company shall be subject to inspection at any reasonable time by
representatives of the Company.
VI. ADVERTISING
A. The Company will advertise its products and provide promotional
material in accordance with its advertising policies. The Agent may
also advertise in his sole discretion, subject to the requirements in
Paragraph B. below.
B. The Agent will submit all signs and advertising copy, including, but
not limited to, sales brochures, newspaper advertisements, radio and
television commercials, all sales promotional plans and devices, and
all customer contract forms, guarantee certificates and other forms and
materials to the Company for approval if they use or contain any
reference to any service xxxx or trade name of the Company or of any of
its affiliates or subsidiaries. The Agent will not use any such
advertising material or sales promotional plan or device without
obtaining prior written approval from the Company. The Company has the
right to disapprove any or all of the aforesaid advertising forms and
other materials insofar as they, in the exclusive judgment of the
Company, do not conform to Company policy regarding use of Company
service marks or trade names, may subject the Company to liability,
loss of goodwill, damage to Company reputation or Company customer
relations, may fail to adhere to the requirements of any federal, state
or local governmental rules, regulations and laws; or may fail to
conform to community or Company standards of good taste and honest
dealing.
VII. SERVICE XXXX AND TRADE NAME PROTECTION
A. The Agent agrees to cooperate fully in the quality control program
conducted by the Company relating to the use of its service marks and
trade names and the nature and quality of services rendered and goods
distributed under its service marks and trade names. The Company will
have the right to specify, delineate or limit the services of goods on,
or in
connection with, which the Agent may use any of its service marks or
trade names. In the event that the nature or the quality of the
services or goods on, or in connection with, which the Agent uses any
of the service marks or trade names of the Company is not acceptable to
the Company, then the Company will have the right to require the Agent
to institute appropriate procedures to correct any deficiencies noted
by the Company.
B. The Agent agrees, at the reasonable request and expense of the Company,
to assist the Company in protecting and enforcing the rights of the
Company in and to any and all of its service marks and trade names
which the Agent may then be using.
C. The Agent will not in any manner encumber, alienate, license, or
transfer to any other entity any right whatsoever concerning the
service marks or trade names that may be granted to the Agent by this
Agreement, except as specifically permitted in writing by the Company.
VIII. COMPANY PROPERTY
A. The Agent agrees that all materials furnished to him by the Company
including manuals, computer programs, microfiche and similar lists and
records and any derivative reports are the property of the Company and
may contain trade secrets. The Agent agrees that he will not at any
time or in any manner, use, copy, duplicate, disseminate, divulge,
communicate or permit any third party to access any confidential
information or any information containing trade secrets concerning any
matters affecting or relating to the pursuits of the Company, except
upon direct written authority of the Company. All Company property
including, but not limited to, that listed in this paragraph must be
surrendered to the Company upon demand or termination of this
Agreement. The Agent agrees that he will not use, or permit to be used,
Company property or any information obtained or derived therefrom in
any manner, directly or indirectly, other than in the performance of
this Agreement.
B. Furthermore, upon termination of this Agreement, the Agent agrees to
continue to treat as confidential any information concerning any
matters affecting or relating to the pursuits of the Company that is
not otherwise lawfully available to the public and that has been
obtained by the Agent during the term of this Agreement.
C. Confidential information includes, but is not limited to, business
plans of the Company and, with respect to life and annuities and all
other business vested in the Company pursuant to Section III C. of this
Agreement, information regarding the names, addresses, and ages of
policyholders of the Company; types of policies-, amounts of
insurance-, premium amounts-, policy expiration or renewal dates-,
policyholder listings and any policyholder information subject to any
privacy law which was acquired or came into the Agent's possession
during the term of this Agreement. All such confidential information is
wholly owned by the Company.
D. Any confidential information or trade secrets recorded on paper,
electronic data file, or any other medium, whether provided by the
Company or by the Agent is the exclusive property of the Company, as is
any such medium and any copy of such medium.
IX. TERMINATION OF AGREEMENT
A. This Agreement may be terminated.
1. At any time by mutual agreement of the parties in writing.
2. By either party upon providing ninety (90) days prior written
notice to the other or such greater notice as may otherwise be
required by the law of the state in which the Agent is
licensed.
3. By the Company, for cause immediately upon providing written
notice to the Agent. Cause may include, but is not limited to,
breach of this Agreement, fraud, forgery, misrepresentation,
or conviction of a felony.
B. This Agreement will be terminated automatically:
1. On the effective date of any sale, transfer, or merger of the
Agent's business or interest therein unless the Company
consents in writing to the assignment of the Agreement or
enters into a new Agency Agreement.
2. Upon the cancellation or nonrenewal of the Agent's license as
an insurance agent.
3. Upon the surrender of or the election not to renew the
Company's license to sell insurance in all lines in the state
in which the Agent is licensed.
X. OBLIGATIONS UPON TERMINATION
A. If this Agreement is terminated:
1. With respect to an Automobile line policy having a term of six
(6) months:
a. Unexplored policies shall be continued in force,
until their next anniversary date, subject to earlier
termination in accordance with the Company's
underwriting standards.
b. The Company shall grant a renewal for one six (6)
month term, or such longer period of time as may
otherwise be required by the law of the State in
which the Agent is licensed, with respect to any
policy having an anniversary date during the twelve
(12) month period immediately following termination
hereof except:
- for nonpayment of premium, or
- when in the sole opinion of the Company
the risk does not meet the Company's
then current underwriting standards.
2. With respect to all other policies:
a. Unexpired policies shall be continued in force, until
expiration, subject to earlier termination in
accordance with the Company's underwriting standards.
b. The Company shall grant a renewal for a term not
exceeding twelve (12) months, with respect to any
policy expiring during the twelve (12) month period
immediately following termination hereof except:
- for nonpayment of premium, or
- when in the sole opinion of the Company
the risk does not meet the Company's
then current underwriting standards.
3. Where required by state law or in instances designated by the
Company that renewals will be granted after the next six (6)
month term referenced in Paragraph A. 1. b. above or the one
twelve (12) month term referenced in Paragraph A. 2. b. above,
the Company will pay the Agent a service fee of 3.5% of net
written premium instead of the commissions set force on the
Commission Schedule.
B. With respect only to the servicing of policies continued in force or
renewed after the termination of this Agreement, the Agent shall
continue to be the duly authorized representative of the Company,
subject to all of the provisions of this Agreement, except that the
Agent shall not, without the prior approval of the Company bind any new
risk or increase or extend the Company's liability under, or alter the
terms of, any such policy.
C. Any unused applications and other Company supplies furnished by the
Company to the Agent shall always remain the property of the Company
and shall be accounted for and returned by the Agent to the Company on
demand.
D. The Company will provide the Agent at his request with a record of
policies in force, their expiration dates and details of coverage.
XI. ARBITRATION
In the event of any dispute arising out of or under this Agreement between the
Agent and the Company, the Agent and the Company shall make every reasonable
effort to resolve such dispute in good faith, informally. If the parties cannot
agree on a settlement of the dispute, then both parties agree to submit such
dispute to arbitration. The American Arbitration Association or any other
mutually agreeable dispute resolution organization will be used to arbitrate
such dispute, with the expenses borne equally. The determination of the
arbitrators will be final and binding on all parities hereto.
XII. GENERAL PROVISIONS
A. Except with respect to a change in any rate of commission, this
Agreement may be amended or revised only in writing by mutual agreement
between the Agent and the Company.
B. The descriptive headings of this Agreement are intended for reference
only and will not affect the construction or interpretation of this
Agreement.
C. Whenever required for proper interpretation of this Agreement, the use
of any gender shall include all genders.
D. If any provision or part of this Agreement is determined to be invalid
or otherwise unenforceable under law, the remaining provisions and
parts will not be affected and shall remain in full force and effect.
E. The failure of either party to insist upon the performance of any of
the terms of this Agreement in any one or more instances will not be
construed as a waiver or relinquishment of the future performance of
any such term. The obligation of the parties with respect to any such
future performance will continue in full force and effect.
F. This Agreement shall be interpreted, construed, and governed by the
laws, other than the laws of conflict, of the State of Illinois.
XIII. ENTIRE AGREEMENT
This Agreement is the sole and entire Agency Agreement between the Company and
the Agent, and it supersedes and replaces any Prior agent, or other agreement
between the Company and the Agent. This Agreement also supersedes any oral
statements and representations by the Company to the Agent and prior written
statements and representations by the Company to the Agent in letters, manuals,
booklets, memoranda or any other format.
IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by its
authorized representative, the Agency Consulting Manager, and the Agent hereby
accepts the terms of this Agreement.
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Agency Owner(s)/Principal(s)
ALLSTATE INSURANCE COMPANY
ALLSTATE INDEMNITY COMPANY
ALLSTATE LIFE INSURANCE COMPANY
ALLSTATE MOTOR CLUB, INC.
--------------------------------- ---------------------------------------
Date Agency Consulting Manager
ADDENDUM TO ALLSTATE AGENCY AGREEMENT
In addition to the terms and conditions agreed to between the Agent and the
Company in the Allstate Agency Agreement dated ____________, (hereinafter
referred to as "the Agreement") both parties further agree that:
1. During the term of the Agreement, the Agent is authorized to accept and
receive on behalf of the Company, subject to the terms and conditions
set forth in this Addendum and in Section 1. B. of the Agreement,
proposals for insurance from other insurance agencies with whom the
Agent has contracted as part of an affiliation arrangement (hereinafter
referred to as "participating member agencies").
2. The Agent will not submit business from a participating member agency
to the Company unless the Company has previously approved that
participating member agency for the submission of business.
3. The Company's approval for the submission of business from a
participating member agency may be withdrawn at any time upon 90 days'
written notice to Agent and the opportunity during the 90 day period
for Agent to correct any deficiencies which may have been the ground
for withdrawal of Company's approval. Provided, however, that the 90
day notice period shall not be required in instances of fraud,
intentional misrepresentation, gross negligence or similar behavior.
4. The currently approved participating member agencies, principals, and
locations are set forth in Attachment B, as may be amended from time to
time.
5. The authority granted to the Agent under Paragraph 1. of this Addendum
is conditional based upon the Agent meeting the premium commitments as
mutually agreed to in Attachment C and updated annually, Should the
Agent fail to meet those premium commitments, said authority is
withdrawn and this Addendum will have no further effect.
6. The contracts between the Agent and all participating member agencies
will have, at a minimum, provisions requiring all participation member
agencies to-
a. obtain and maintain errors and omissions coverage as described
in Section IV. C. of this Agreement;
b. comply with the Company's business procedures as described in
Section V. of the Agreement"
c. obtain written approval from the Company prior to using
advertising which contains any reference to any service marks
or trade names of the Company as described in Section VI. of
the Agreement-,
d. cooperate in the quality control program conducted by the
Company relating to the use of its service marks and trade
names and the nature and quality of the services rendered as
described in Section VII of the Agreement-,
e. agree that: 1) all Company materials furnished to them by the
Company or the Agent including manuals, computer, programs,
microfiche, similar lists, and records of any derivative
reports are the property of the Company and may contain trade
secrets; 2) they will not at any time, or in any manner, use,
copy, duplicate, disseminate, divulge, communicate or permit
any third party to access any confidential information or any
information containing trade secrets concerning any matters
affecting or relating to the pursuits of the Company, except
upon direct written permission of the Company; 3) they will
not use, or permit to be used, property of the Company or any
information obtained or derived therefrom in any manner,
directly or indirectly, other than in the performance of their
agreement with the Agent; and 4) they will surrender all
property of the Company including, but not limited to, the
property listed in this paragraph to the Company upon demand,
termination of the contract between themselves and the Agent,
or termination of the Agreement, and
f. further agree that: 1) confidential information includes, but
is not limited to, business plans of the Company and, with
respect to life and annuities and all other business vested in
the Company pursuant to Section III. C. of the Agreement
information regarding the names, addresses, and ages of the
policyholders of the Company-, types of policies; amounts of
insurance; premium amounts; policy expiration or renewal
dates; policyholder listings and any policyholder information
subject to any privacy law which was acquired of came into the
possession of the participating member agency during the term
of the Agreement; and 2) all such confidential information is
wholly owned by the Company.
7. The Company shall have the right to enter into an agency agreement with
any participating member agency upon termination of the contract
between such agency and the Agent. The Company will be required to wait
months or receive written authorization from the Agent before
contacting such agency.
8. To the extent that any of the terms and conditions of the contract
between the Agent and any participating member agency conflict with the
Agreement and this Addendum, the Agreement and this Addendum will
govern.
Except as provided in this Addendum, the terms and conditions of the Agreement
shall remain in full force and effect. This Addendum shall not be binding unless
it is signed by an authorized representative of the Agent and the Company.
ACCEPTED:
Allstate Insurance Company
By: ---------------------------------------------- By: ----------------------------------------------------
Title: ------------------------------------------- Title: -------------------------------------------------
Date: -------------------------------------------- Date: --------------------------------------------------
ATTACHMENT B:
Agent Name ---------------------------------------------------------
Managing Principal: ------------------------------------------------
City/State: --------------------------------------------------------
Agent Number: ------------------------------------------------------
Appointment Date: --------------------------------------------------
PARTICIPATING MEMBER AGENCIES
Agency Name Location: State: Date Agency Became a
Participating Member:
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ATTACHMENT C:
Agent Name ---------------------------------------------------------
Managing Principal: ---------------------------------------------------------
City/State: ---------------------------------------------------------
Agent Number: ---------------------------------------------------------
Appointment Date: ---------------------------------------------------------
THE PREMIUM COMMITMENTS LISTED BELOW HAVE BEEN AGREED TO AND ARE MADE A PART OF
THE AGREEMENT. THE PARTIES ACKNOWLEDGE THAT, IF THE AGREEMENT WAS EXECUTED AFTER
JANUARY 1 OF ANY CALENDAR YEAR, THE ANNUAL PREMIUM COMMITMENTS LISTED MAY BE
UPDATED ANNUALLY PURSUANT TO THE AGREEMENT
Line: Annualized Premium: Pro Rate Premium/Items for
the Period: __________
Standard Personal Auto --------------------------------- -----------------------------
Std Personal Property --------------------------------- -----------------------------
Indemnity Auto --------------------------------- -----------------------------
Indemnity Property --------------------------------- -----------------------------
Commercial Auto --------------------------------- -----------------------------
Commercial Property --------------------------------- -----------------------------
Commercial Other --------------------------------- -----------------------------
Total Premium --------------------------------- -----------------------------
Life Premium --------------------------------- -----------------------------
Motor Club Items --------------------------------- -----------------------------
Flood Items --------------------------------- -----------------------------
ATTACHMENT A-1 (1998) (PAGE 1)
ALLSTATE INSURANCE COMPANY
ALLSTATE INDEMNITY COMPANY
ALLSTATE MOTOR CLUB, INC.
AGENCY COMMISSION SCHEDULE
===============================================================================
AGENCY NAME AND LOCATION SCHEDULE EFFECTIVE DATE
-------------------------------------------------------------------------------
Brooke Corporation
===============================================================================
I. ALL LINES OF PROPERTY AND CASUALTY COMPANY:
New Renewal
Property & Casualty Lines 15% 15%
Parts & Labor Plus Program 18% N/A
EXCEPT: 10%
Long Haul Truckers, Logging Trucks and Public Livery
OTHER:
II. ALLSTATE INDEMNITY
New Renewal
Homeowner 15% 15%
Automobile 10% 10%
III. ALLSTATE MOTOR CLUB
New Renewal
Motor Club 45% 0%
Motor Club Dealership Program 8% 8%
IV. ALLSTATE FINANCE PROGRAM
AUTO:
New $ 75
Used 125
Leased 100
BOAT $100
RV $100
HOME EQUITY OR FIRST MORTGAGE* $400
(*Not available in Conn., Ga., Mn., Or., Pa., RI., or SC.)
ATTACHMENT A-1 (1998) (PAGE 2)
ALLSTATE LIFE COMMISSION SCHEDULE
ALLSTATE LIFE INSURANCE COMPANY
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AGENCY NAME AND LOCATION SCHEDULE EFFECTIVE DATE
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Brooke Corporation
================================================================================
LIFE (Except New York)
New Policy First Renewal Second Renewal Third
or Year Year and Subsequent
New Rider
Revised Whole Life
- Plan C/E/I
- < $100,000 50 5 5 5 (d)
- +$100,000 50 5 5 5 (d)
Universal Life Xxxxxxxx 00 0 0 0 (x)
XXX00 XXXX (c) 40 5 5 5 (a)
ULCLTR 45 2 0 0
Universal Life 100R 40 5 5 5(a)
Contributions in excess
*Minimum Annual prem. 2 2 2 2
Mortgage Security Plan (b) 40 10 10 5
Home Mortgage Protection
- < $100,000 40 10 10 5
- +$100,000 40 10 10 5
Allstate Protector Plus (c)
- Plan C/E/I 40 10 10 5
Allstate Maximum Term (c)
- Plan C/E/I 40 10 10 5
(a) 2% in policy 4 and subsequent
(b) Not available in ME, NC, NY, OH, OR, SC, TX, and VT
(c) Not available in NJ
(d) 2% in policy 5 and subsequent
Note effective 7/1/97: Primary Insured Increases 40%, Replacements 35%, and
Multiples 40%
PLUS PERFORMANCE BONUS AGREEMENT-98
- Effective date of agreement:
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- Agency number:
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- When combining locations for the Plus Performance Bonus, list the agency
numbers below
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Primary Agency # List all sub-location numbers
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This agreement is between ALLSTATE INSURANCE COMPANY (herein referred to as "the
Company") and BROOKE CORPORATION, County of OKLAHOMA, State of OKLAHOMA (herein
referred to as "the Agency").
In addition to commissions separately provided as set forth in the Cluster
Agency Agreement or the Agency Agreement the Company will pay the Agency a Plus
Performance Bonus in accordance with the Plus Performance Bonus Commission Rate
Table attached hereto as Schedule A-96, and the following provisions and terms:
PROVISIONS AND TERMS
I. The Plus Performance Bonus period shall be a calendar year, beginning
January 1 and ending December 31. However, the first Plus Performance
Bonus period shall begin on the effective date of this Agreement and
end on December 31.
II The Agency will qualify to receive a Plus Performance Bonus Commission for a
particular period if:
A. The ratio of "losses paid" to "premiums earned," on "included
classes of insurance," for such period is 50% or less, and
B. The net premiums written by the Agency and recorded by the
Company for "included classes of insurance" exceed the
following applicable amount (except as described in Paragraph
C. below):
$ 100,000 for the first Plus Performance Bonus Period.
$ 200,000 for the second Plus Performance Bonus Period.
$ 300,000 for each subsequent Plus Performance Bonus Period.
C. The Company reserves the right to adjust the net written
premiums requirement for each Plus Performance Bonus Period
subsequent to the second Plus Performance Bonus Period. In
addition, the Company also reserves the right to change the
net written premiums requirements for any Plus Performance
Bonus Period upon the sale, transfer, merger or expansion of
the Agency's business, or upon any change in economic
conditions of the area where the Agency is performing under
the Cluster Agency Agreement or the Agency Agreement with the
Company.
D. "Included classes of insurance" means all classes of insurance
except the following:
Private Passenger Automobile policies issued by Allstate
Indemnity Company, except in Texas and approved Texas border
state locations
Mechanical Breakdown Insurance and motor vehicle Service
Contracts offered through Allstate Insurance Company or any of
its affiliates or subsidiaries
Risks subject to retrospective Rating Plans
Business administrated by Underwriting Associations,
Syndicates or Pools
Accident and Health
Life Insurance and Annuities
Boiler and Machinery
Fidelity Bonds and Surety Bonds (note: Commercial
Policies are an
"included class of
insurance," and any
fidelity loss on a
Commercial Policy will
be used to calculate the
ratio of "losses paid"
to "premiums earned" as
provided in Section II.,
A., above)
Private Passenger Automobiles policies issued by Allstate
County Mutual Insurance Company
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III. The amount of Plus Performance Bonus payable to the Agency if the
Agency qualifies in accordance with Section II., above, with respect to
a particular period will be computed as follows:
A. The Plus Performance Bonus Commissions Rate is determined from
the Plus Performance Bonus Commission Rate Table, attached as
Schedule A-96, by selecting the rate which appears in the
applicable Loss Ratio column to the right of the applicable
Eligible Not Written Premium Current Period bracket
B. The resulting Rate determined in A., above, is then applied to
the premiums earned for the period. The result is the amount
of Plus Performance Bonus Commission payable for the period.
C. The Plus Performance Bonus Commission payable will be
increased by the Plus Performance Growth Bonus, if applicable,
as defined at the bottom of the Plus Performance Bonus
Commission Rate Table (Schedule A-96).
IV. "Premiums earned" is defined as net premiums written and recorded
during the Plus Performance Bonus period, plus the unearned premium
reserve at the beginning of the period, minus the unearned premium
reserve at the end of the period.
V "Losses paid" on "included classes of insurance" is defined as losses
and allocated loss adjustment expense paid during the Plus Performance
Bonus period. Losses and loss adjustment expense are defined as net,
after deducting salvage and subrogation received, as shown by the
Company's records.
VI. "Losses paid," as defined in Section V., above, shall be limited to
$200,000 from any one accident or occurrence on a per claim basis.
VII. "Deficit" is defined as the amount of paid losses that are in excess of
50% of earned premiums for the period. Any deficit from one period
shall be carried forward, added to and considered part of the paid
losses in the computation of Plus Performance Bonus Commission for the
next succeeding period. The deficit shall be carried forward for one
period only and any portion of such deficit remaining shall be waived
thereafter.
VIII. At the expiration of each Plus Performance Bonus period the Company
shall, within a reasonable time, make the necessary calculations and
remit to the Agency any Plus Performance Bonus as may be due. No charge
or deduction for Plus Performance Bonus shall be made or claimed by the
Agency and such bonus is payable only by Company check
IX This Agreement shall continue in effect unless terminated in accordance
with the same terms and conditions of termination as the Agency
Agreement. In the event of termination the right of the Agency to Plus
Performance Bonus, as provided herein, shall cease as of January 1 of
the calendar year in which such termination shall become effective.
X. The figures of the Company as to any amounts in the calculation of the
Plus Performance Bonus shall be conclusive. In the event of
disagreement as to any other interpretation or application of this
Agreement, the parties agree to resolve such disagreement in accordance
with Section XI. of the Cluster Agency Agreement or the Agency
Agreement
IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by its
authorized representative, the Agency Consulting Manager, and the Agency hereby
accepts the terms of this Agreement
ALLSTATE INSURANCE COMPANY
By: -------------------------------- -----------------------------------------
Agency Consulting Manager
-----------------------------------------
Agency Consulting Manager
PLUS PERFORMANCE BONUS COMMISSION RATE TABLE
SCHEDULE A-96
The applicable Bonus Commission Rate from the table below will be applied to
premiums earned for the period to determine the Performance Bonus Commission for
the period.
ELIGIBLE NET
WRITTEN PREMIUMS LOSS RATIO
---------------- -----------
CURRENT PERIOD 30% or LESS 30.1%-35.0% 35.1%-40.0% 40.1%-45.0% 45.1%-50.0%
-------------- ----------- ----------- ----------- ----------- -----------
$ 100,000 $ 200,000 5.25 3.75 2.50 1.50 0.75
200,001 350,000 6.00 4.50 3.25 2.25 1.50
350,001 500,000 7.25 5.75 4.50 3.50 2.75
500,001 750,000 8.50 7.00 5.75 4.75 4.00
750,001 1,000,000 9.75 8.25 7.00 6.00 5.25
1,000,001 2,000,000 11.25 9.75 8.50 7.50 6.75
Over $2,000,000 12.75 11.25 10.00 9.00 8.25
-IN ADDITION-
PLUS PERFORMANCE GROWTH BONUS
--------------------------------------------------------------------------------
The Plus Performance Bonus Commission payable will be increased by a percentage
equal to one-half the percentage increased in eligible net written premiums in
the current period over the preceding period. The maximum Growth Bonus paid will
be 50% of the Plus Performance Bonus Commission.
--------------------------------------------------------------------------------
SPECIALTY PERFORMANCE BONUS AGREEMENT
This Agreement is between ALLSTATE INDEMNITY COMPANY (herein referred to as "the
Company") and BROOKE CORPORATION County of Oklahoma State of OKLAHOMA (herein
referred to as "the Agent").
In addition to commissions separately provided as set forth in the Agency
Agreement, the Company will pay the Agent a Specialty Performance Bonus in
accordance with the Specialty Performance Bonus Commission Rate Table attached
hereto as Schedule A, and the following provisions and terms:
PROVISIONS AND TERMS
I. The Specialty Performance Bonus period shall be a calendar year,
beginning January 1 and ending December 31. However, the first
Specialty Performance Bonus period shall begin on the effective date of
this Agreement and end on December 31.
II. The Agent will qualify to receive a Specialty Performance Bonus
Commission for a particular period if the ratio of losses incurred
(Including any deficit carried forward from the previous period) to
premiums earned, on "Specialty business"; for such period, is 55% or
less. "Specialty business" is defined as:
Private Passenger Automobile policies issued by Allstate Indemnity
Company, except in Texas and approved Texas Border states locations.
Private Passenger Auto policies issued by Allstate County Mutual
Insurance Company.
The terms referred to in the following sections III - VII and used in
the calculation of the Specialty Performance Bonus pertain to Specialty
business only.
III. The amount of Specialty Performance Bonus payable if the Agent
qualifies in accordance with Section II. above, with respect to a
particular period is computed as follows:
A. The Specialty Performance Bonus Commission Rate is determined
from the Specialty Performance Bonus Commission Rate Table,
attached as Schedule A, by selecting the rate which appears in
the applicable Loss Ratio column to the right of the
applicable Eligible Net Written Premium Current Period
bracket.
B. The resulting Rate determined in A. above is then applied to
the premiums earned for the period. The result is the amount
of Profit it Bonus Commission payable for the period.
IV. "Premiums earned" on Indemnity business is defined as net premiums
written and recorded during the Specialty Performance Bonus period,
plus the unearned premium reserve at the beginning of the period, minus
the unearned premium reserve at the end of the period.
V. "Losses incurred" on Indemnity business is defined as the losses and
allocated loss adjustment expense paid during the Specialty Performance
Bonus period, plus reserve for unpaid losses and allocated loss
adjustment expense at the end of the period, less reserve for unpaid
losses and allocated loss adjustment expense at the beginning of the
period. Losses and loss adjustment
expense are defined as net, after deducting salvage and subrogation
received, as shown by the Company's records.
VI. Losses Incurred - Stop-Loss Provision.
A. Losses incurred, as defined in Section V. above, shall be
limited to $200,000 from any one accident or occurrence on a
per claim basis.
B. This provision shall not apply to any loss which occurred
prior to January 1, 1990.
C. Loss increases or decreases caused by an adjustment in the
original loss incurred for a reported claim shall not affect
the stop-loss calculation in the previous Specialty
Performance Bonus period.
VII. "Deficit" is defined as the amount of incurred losses that are in
excess of 55% of earned premiums for the period. Any deficit from one
period shall be carried forward, added to and considered part of the
incurred losses in the computation of Specialty Performance Bonus
Commission for the next succeeding period. The deficit shall be carried
forward for one period only and any portion of such deficit remaining
shall be waived thereafter.
VIII. At the expiration of each Specialty Performance Bonus period the
Company shall, within a reasonable time, make the necessary
calculations and remit to the Agent any Specialty Performance Bonus as
may be due. No charge or deduction for Specialty Performance Bonus
shall be made or claimed by the Agent and such Specialty Performance
Bonus is payable only by Company check.
IX. This Agreement shall continue in effect unless terminated by either
party subject to the same terms and conditions of termination as the
Agency Agreement. In the event of termination the right of the Agent to
Specialty Performance Bonus, as provided herein, shall cease as of
January 1 of the calendar year in which such termination shall become
effective.
X. The figures of the Company as to any amounts in the calculation of the
Specialty Performance Bonus shall be conclusive. In the event of
disagreement as to any other interpretation or application of this
Agreement, the parties agree to resolve such disagreement in accordance
with Section IX. of the Agency Agreement.
IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by its
authorized representative, the Agency Consulting Manager, and the Agent hereby
accepts the terms of this Agreement.
----------------------------------------
Agency Owner/Principal
ALLSTATE INDEMNITY COMPANY
ALLSTATE COUNTY MUTUAL
INSURANCE COMPANY
--------------------------------- -----------------------------------------
Date Agency Consulting Manager
AMENDMENT TO
ALLSTATE INDEMNITY SPECIALTY
PERFORMANCE BONUS AGREEMENT
The parties to the Allstate Indemnity Special Performance Bonus Agreement
entered into and dated ____________ (hereinafter the Agreement ), in exchange
for valuable mutual consideration, do hereby agree to the following amendments
to the Agreement:
All references in the Agreement to Schedule A are deleted, and replaced
with a reference to Schedule A-96.
IN WITNESS WHEREOF, the Company, by and through by its authorized
representative, the Agency Consulting Manager, and the Agent have executed this
Amendment on the date first stated below.
ALLSTATE INDEMNITY COMPANY
BY: -----------------------------------------
Agency Owner/Principal
DATED: ----------------------------- -----------------------------------------
Agency Consulting Manager
SPECIALTY PERFORMANCE BONUS COMMISSION RATE TABLE
SCHEDULE A-96
The applicable Bonus commission Rate from the table below will be applied to premiums earned for the period
to determine the Specialty Performance Bonus Commission for the period.
------------------------------------------------------------------------------------------------------------------------------------
Eligible Net
Written LOSS RATIO
Premiums ---------------------------------------------------------------------------------------------------------------
Current Period 35.0% or Less 35.1%-40.0% 40.1%-45.0% 45.1%-50.0% 50.1%-55.0%
------------------------------------------------------------------------------------------------------------------------------------
$ $ % % % % %
50,000 200,000 5.25 3.75 2.50 1.50 0.75
200,001 350,000 6.00 4.50 3.25 2.25 1.50
350,001 500,000 7.25 5.75 4.50 3.50 2.75
500,001 750,000 8.50 7.00 5.75 4.75 4.00
750,001 1,000,000 9.75 8.25 7.00 6.00 5.25
Over 1,000,000 11.25 9.75 8.50 7.50 6.75
------------------------------------------------------------------------------------------------------------------------------------
