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EXHIBIT 6.01
SAFECO
PROPERTY AND CASUALTY INSURANCE
AGENCY AGREEMENT
This Agreement is executed by You and Us. "You" and "Your" refers to the
individual or entity named on this contract. "We" and "Us" refers to the
Companies You are appointed with as listed on this page.
1. This Agreement shall consist of this page and the pages identified by the
following form numbers:
AM-1001 R3 1/98, AM-1116 R3 11198, 7-2015 KS 3/99
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2. This Agreement applies only to the lines checked:
P/L C/L
SAFECO Companies /X/ /X/
American States Companies /X/ /X/
3. You represent the Enterprise Group(s) checked below:
SAFECO Personal Lines Insurance /X/
American States Business Insurance /X/
SAFECO Commercial Insurance / /
4. In order to complete references made in other parts of this Agreement,
the following information is supplied by You:
A. Premium Trust (referred to in paragraph 3.3.2):
(1) Bank in which account maintained _________________________________
(2) Name on account _______________ Account Number ___________________
5. You are authorized to represent the companies checked below in each state
where 1) each company is authorized to do business and 2) where We have
notified You that Your appointment with Us has been filed and approved by
the appropriate state regulator, or You have provided Us with a copy of
Your appropriate broker's license.
This supersedes all previous agreements and shall be effective
March 1 , 1999 , but it
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(Month) (Day) (Year)
shall not be effective earlier than the valid appointment date with the state
You have indicated in the address below.
Executed this 1 day of March , 1999 .
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(Day) (Month) (Year)
/X/ SAFECO Insurance Company of America
/X/ General Insurance Company of America
/X/ First National Insurance Company of America
/X/ SAFECO National Insurance Company
/X/ SAFECO Insurance Company of Illinois
/ / SAFECO Lloyds Insurance Company
/X/ American Sates Insurance Company
/X/ American Economy Insurance Company
/X/ American States Insurance Company of Texas
/ / American States Lloyds Insurance Company
/X/ American States Preferred Insurance Company
BROOKE CORPORATION
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Name of Agency
PO BOX 426
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PHILLIPSBURG KS 67661-0426
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City State Zip
05-27-2318 15-10182
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SAFECO Stat No. American States Stat No.
BY: /s/ W. Randall Stoddard BY /s/ Michael Hess
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W. RANDALL STODDARD, PRESIDENT President
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PROPERTY & CASUALTY INSURANCE AGENCY AGREEMENT
("You" and "Your" refers to the individual or entity named on this contract.
"We," "Us" and "Our" refers to the Companies You are appointed with as listed
on the cover sheet.)
1.0 YOUR AUTHORITY
We grant You the following authority:
1.1 To receive, accept and bind in any jurisdiction where You are
properly licensed and where We have notified the state that
You are Our agent, proposals for contracts of insurance and
for fidelity bonds in such classes of risks and to such limits
as We may from time too time authorize by letter of
instruction, underwriting guide, binding guide, or other
written instruction.
1.2 To countersign the kinds of insurance contract to which this
Agreement applies. Where countersignature by You of a new or
renewal policy written by You is required by law, You
authorize Us to countersign on behalf of You by any method
authorized by applicable state statutes.
1.3 To collect, receive, and receipt for premiums on insurance
placed with Us by You.
2.0 YOUR LIMITATIONS
2.1 You shall not bind Us on risks deemed unacceptable in
accordance with Our underwriting standards as identified in
Paragraph 1.1 and as supplemented from time to time.
2.2 To refrain from binding or writing policies of insurance when
the object of the insurance is subject to unusually increased
risk such as covering buildings for windstorm when storm
warnings have been posted, or when a storm is in progress, or
such as writing earthquake coverage on structures located in
an area where a significant earthquake has occurred within the
previous 10 days.
2.3 Your authority does not extent to the use of Our name or
logo(s) in advertising or promotional materials without Our
prior written consent.
2.4 You shall not authorize any other person or entity (except
Your employees) to exercise any of Your authority described in
this Agreement without prior written consent from Us.
3.0 AGENCY OPERATIONS
3.1 Documentation: You will forward to Us promptly, after coverage
is bound or amended, copies of all evidence of insurance, or
modifications thereof or applications therefor, effected by
You.
3.2 Records - Inspection, Control and Use:
3.2.1 You will maintain a complete record of Your
transactions with Us and with policyholders which
shall be open to Our inspection at any time.
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3.2.2 You shall remain owners of the records and use and
control of expirations, except as provided in
Paragraph 8.1. If you abandon the business, ownership
will vest in Us. Expirations shall consist of the
exclusive right to own and use customer information
generated or developed by You, including customer
names, addresses, coverage terms and conditions in
connection with the solicitation of renewal business.
3.3 Premium Collection and Transmittal
3.3.1 Premiums collected on Our behalf are held by You in a
fiduciary capacity. You have no interest in the
premiums and, except for the amount of commissions
authorized by Us to be deducted by You, You will make
no deductions from or make personal use of such funds
nor retain any such premiums as an offset against any
disputed claim You may have against Us before paying
the same to Us.
3.3.2 You will establish and maintain a premium trust
account in the federally insured bank or savings &
loan designated on form AM-1000 (the first page) of
this Agreement. You may not commingle premiums with
other funds except with Our written permission. If
state law permits, You may retain any interest earned
on premiums while they are on deposit in Your premium
trust account. Such retention of interest earned
creates no ownership interest on Your part in the
premiums on deposit in the trust account. You shall
remain liable for payment of such premiums until they
are received by Us. You shall remain liable for loss
which occurs by reason of default or failure of the
bank in which the trust account is maintained.
3.4 Direct Bill Policies
3.4.1 Direct Billing:
You may request either agency billing or direct
billing of Commercial policies. Personal policies are
issued on a direct billing basis only. Each direct
billing payment plan We offer requires an initial
valid payment of amounts which will vary by plan.
Valid payments include: cash; checks or electronic
funds transfer honored by the appropriate financial
institution; money orders; or other negotiable
instruments approved in advance by Us.
3.4.2 When You submit an application for a policy to be
billed on a Direct Bill basis, You assume full
responsibility for collection and payment to Us of
the required initial payment, without deduction of
Your commission. If We do not receive the required
initial payment from You or the Insured, We will send
direct notice of cancellation to the insured unless
You furnish the evidence of cancellation We require.
3.4.3 If We must send notice of cancellation for
non-payment of the initial valid payment, We will
provide at least the number of days of coverage
required by law prior to the effective date of
cancellation. We will bill You for the earned premium
for this coverage. If You do not pay Us the earned
premium after We have billed You, We will deduct if
from Your next commission check.
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3.4.4 After the initial valid payment, We assume
responsibility for billing and collecting from the
insured all subsequent renewal, installment, and
endorsement premiums. We agree to compute and remit
to You promptly following the close of each month the
commissions We owe You, less the commissions You owe
Us on return premiums, in accordance with the
applicable schedule of commissions.
3.4.5 When Our direct billing plan provides for advance
payment of commission and subsequent installments are
not paid to Us by the insured, We will cancel the
policy for non-payment and deduct the unearned
commission from Your next commission check.
3.4.6 If Your Direct Bill Commission statement indicates
that You owe Us money, You agree to pay Us the full
amount owed within 10 days of Your receipt of Your
commission statement.
3.4.7 Commercial Direct Bill:
When You request one of the Commercial Direct Bill
payment plans, You are responsible for the initial
payment required by that plan unless We have agreed
in writing to some other arrangement. If Your insured
pays the full term premium in advance of the month in
which the policy becomes effective, We will pay You
the commission on the policy on the next commission
statement following the month in which the policy
becomes effective.
3.4.8 Personal Direct Bill:
For the first policy period premium, Your application
shall be accompanied by the initial valid payment
required for the payment plan the insured has
selected, without deduction of Your commission. If
Cash on Delivery (COD) is allowed in Your state and
You request COD on the application, We will bill the
insured for the required initial payment, but Our
doing so does not relieve You of Your responsibility
for its payment. If We do not receive the required
initial payment from You or from the insured by 35
days from the inception date of the policy, We will
send direct notice of cancellation to the insured
unless You furnish the evidence of cancellation which
We require. You assume responsibility for collection
and payment to Use for coverage provided on bound
applications that You submit to Us but which are not
eventually issued, unless You furnish the evidence of
cancellation We require.
3.5 Agency Billed Policies
3.5.1 You agree to pay Us net premiums due on all insurance
placed by or through You with Us not later than 45
days after the end of the month in which the business
written becomes effective, whether such premiums are
collected, collectible or otherwise, and to refund
pro rata to Us commission on return premiums due or
installment premiums uncollected at the same rate as
that applicable to the commission originally allowed
on such business. Our failure to bill You for an item
shall not relieve You of the responsibility to pay
for the item. If You are delinquent in either
accounting or payment due Us, We may, by notice to
You, suspend Your authority to write any new or
renewal business or change any existing bonds.
Payment of overdue amounts shall not automatically
end the suspension, nor shall such suspension prevent
termination of this Agreement.
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3.5.2 You agree that on all policies of insurance You
produce for Us to either finance the premium or
collect it promptly.
3.5.3 If any interim or final premium developed by audit,
or any additional premium resulting from an
adjustment to a retrospective rated policy cannot be
collected by You, We shall undertake direct
collection and You shall not be responsible for such
collection of such premium, provided:
A. You return the item to Us at the location
where monthly premiums are paid by You with
written notification that the item is being
returned for direct collection. Your
notification to Us must take place as soon
as You perceive uncollectibility, but no
later than 30 days after the issue date of
the item; and
B. We shall not pay commission to You on such
premiums which We may accept for direct
collection.
3.6 Agency and Producer Licensing
3.6.1 Maintenance of License:
You will maintain a valid agency license with any
state in which You represent Us. You will ensure that
only persons who are licensed, and properly appointed
by Us, act as agents for business produced by You for
Us. You will notify Us within 3 business days of the
employment or termination of any person appointed to
represent Us. All licensed persons will comply with
any continuing education requirements. If, as a
result of Your failure to comply with these
requirements, We are required to pay administrative
penalties in any state, We shall advise You of the
amount of the fine, and You will reimburse Us
promptly.
4.0 SYSTEMS MASTER LICENSE
4.1 LICENSE GRANT:
4.1.1 You accept and agree that any automated systems
(SYSTEMS) access We may supply to You or make
available for Your use from time to time will be
subject to and governed by the terms and conditions
of the master SYSTEMS license contained in this
Section 4.0. We grant You a license to access and use
such SYSTEMS for the sole purpose of processing and
conducting Our business on an electronic basis. You
are authorized to use the SYSTEMS solely for such
purpose.
4.1.2 We reserve the right to immediately terminate this
master license and Your SYSTEMS access if You attempt
to assign or transfer any rights in the SYSTEMS or
otherwise provide any access to the SYSTEMS to
another party.
4.2 WE AGREE:
4.2.1 To provide You with such access to the SYSTEMS as We,
in Our sole discretion, deem reasonable and necessary
for Your use of the SYSTEMS for the purpose described
in paragraph 4.1.1 above.
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4.2.2 To provide, upon Your request, a copy of data You
have processed or generated through the SYSTEMS, to
the extent that We can retrieve it from the SYSTEMS.
4.3 YOU AGREE:
4.3.1 To purchase, lease or otherwise provide terminal(s)
or other computer equipment We have approved as
reasonably suitable to access and use the SYSTEMS to
electronically process Our business.
4.3.2 To use the SYSTEMS to process Our business according
to Our reasonable instructions.
4.3.3 To be available and to make Your personnel available
for education and training in the use of the SYSTEMS
as We reasonably require.
4.3.4 To compile, maintain and keep all records as required
by law to be maintained by agents or brokers,
irrespective of any records the SYSTEMS produce or
generate, and to make such records available to Us
upon request.
5.0 CONFIDENTIALITY
5.1 You agree not to disclose to third parties without Our prior
written permission any of Our confidential and proprietary
information, including but not limited to loss information
(such as reserve amounts and loss control reports or audits),
security information (such as computer passwords and
identification codes), or information concerning the SYSTEMS
(such as codes and operating instructions for the SYSTEMS).
Your agreement and obligation to safeguard the confidentiality
of such information will survive the termination of this
Agreement and the master license. In the event that You
become, or believe You may be, subject to a court order
requiring the disclosure of any of Our confidential and
proprietary information to a third party, You agree to provide
Us as much notice as possible so that We may intervene and
seek appropriate relief from the court.
5.2 We agree not to disclose to third parties without Your prior
written permission any of Your confidential and proprietary
information, including customer lists, agency production, loss
history and agency payment history. Our agreement and
obligation to safeguard the confidentiality of such
information will survive the termination of this Agreement and
the master license.
5.3 We both agree that neither of us will disclose to third
parties without Your customer's written permission any
confidential customer information, including but not limited
to customer names, addresses, telephone numbers, property
descriptions, policy limits and coverage types, billing and
payment history, driving records and other loss information,
except to the extent that such disclosure is, in Our sole
judgment, part of the business of insurance or in connection
with any governmental or bureau reporting either of us is
required to make.
5.4 Publicly available information, including but not limited to
rating plans filed with government regulators and policy forms
filed with government regulators, is not subject to our
non-disclosure agreement in this section.
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5.5 This non-disclosure agreement shall not prevent maintenance of
proprietary and confidential information in a single Customer
Information File used by the SAFECO group of companies.
6.0 COMPENSATION
6.1 Commissions paid to You or retained by You according to the
schedule of commissions shall be Your sole and full
compensation on such business placed with Us and that such
commissions are payable in consideration of Your faithful
performance of Your duties and obligations as set forth in
this Agreement.
6.2 Any undistributed commission or other funds of Yours that We
hold may be applied at any time to, and as an offset on, any
due and unpaid obligation of Yours to Us.
6.3 You shall not assign Your right to receive commission for any
purpose, e.g., to provide collateral for a loan, without prior
written consent from Us.
6.4 While this Agreement is in effect, You and We agree that
commissions shall be paid to You for the lines of business and
products You write, according to the commission schedule
attached to this Agreement. The commission schedule may be
changed by Us with notice to You as required by state law, or
by mutual written agreement between You and Us.
6.5 No commission will be generated by any additional or return
premium from an adjustment to a retrospective rated policy.
6.6 If Our Electronic Funds Transmission Program for payment of
Your commissions is available to You, and You choose to
participate in it, funds will be transmitted to Your account
under the terms of the Program then in effect.
7.0 AGENCY SALE OR TRANSFER
7.1 You agree to give 30 days advance notice to Us of any sale or
transfer of Your business or its consolidation with another
firm in order that We may, at Our election, either assign this
Agreement to the successor organization or terminate it
according to Section 8.0 of this Agreement.
8.0 TERMINATION
8.1 We agree that in the event of termination of this Agreement,
and provided that You have in accordance with the terms of
this Agreement accounted for and paid over all premiums and
other sums for which You may be liable to Us and are not
otherwise in default on this Agreement, Your records and use
and control of expirations shall remain Your property and be
left in Your undisputed possession. If You have not paid
amounts You owe to Us within 60 days following the termination
of this Agreement, the ownership of the records and the use
and control of the expirations shall vest exclusively in Us
and You shall immediately thereafter forward all such records
to Us.
8.2 This Agreement shall terminate:
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A. Automatically on the date any public authority
cancels or declines to renew Your license or
certificate of authority or all of Our applicable
companies surrender or lose Our certificate(s) of
authority in Your state; or
B. Immediately upon either party giving written notice
to the other in the event of abandonment, fraud,
insolvency or gross and willful misconduct on the
part of such other party; or
C. Upon either party giving the other 90 days advance
written notice (or longer if required by law). If You
have represented Us for more than 3 years and have
reached the minimum level of production for either
personal or commercial lines as specified in the
Profit Plus Bonus Commission Agreement in effect at
the date of termination, a period of rehabilitation
may be established if both of us agree. A separate
agreement between You and Us for the rehabilitation
period will specify what must be done to avoid
termination.
8.3 Effective upon receipt of the notice of termination, Your
authority to solicit, bind, execute and countersign contracts
of insurance and fidelity bonds on Our behalf shall cease.
8.4 You will use Your best efforts to replace all the policies You
have placed with Us with policies of other insurers. We will
provide You a listing of policies to assist You in this
effort.
8.5 We will advise You of the date, as permitted by law, when We
will begin nonrenewing Your accounts. We reserve the right to
cancel or nonrenew policies in force in accordance with Our
underwriting standards or practices.
8.6 With respect to policies remaining in force after termination,
You shall have such limited authority to act on Our behalf as
We set forth in written instruction provided with the notice
of termination or thereafter.
8.7 Unless required by law, We will not pay You commission on
business written or renewed after the effective date of the
termination of this Agreement. If We are required by law to
have You continue to provide service to insureds after this
Agreement has been terminated, We will pay You a service fee
of three percent of premiums written (or such commission as
required by law) after the date of termination of this
Agreement as full compensation for such service. Such payments
will be made at the end of each calendar quarter and shall be
computed based on company records.
9.0 SUSPENSION
Your binding authority shall be suspended:
9.1 Automatically on the effective date of the sale or transfer of
Your business or its consolidation with another firm, unless
We were notified in writing and agreed to the sale or
consolidation.
9.2 Automatically for any owner, office, manager, or other
employee whose license or certificate of authority has been
terminated or nonrenewed by a public authority.
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9.3 Upon written notification of such suspension by the
appropriate regional manager, branch manager, or marketing
manager for Your state for non-payment of premiums or other
reasons.
10.0 INDEMNIFICATION
10.1 We will defend and indemnify You against liability, including
costs of defense and settlements, imposed on You by law for
damages sustained and caused solely by Our acts or omissions,
provided You have not caused or contributed to such liability
by Your own acts or omissions. You agree as a condition of
such indemnification to notify Us promptly of any claim or
suit against You and to allow Us to make such investigation,
settlement or defense, of the claim or suit. We agree to
notify You promptly of any claim or suit against You.
10.2 You agree to defend and indemnify Us against liability to the
extent You would be liable under common law, including cost of
defense and settlement, imposed upon Us when caused solely by
Your acts or omissions in violation of the terms of this
Agreement.
11.0 GENERAL PROVISIONS
11.1 We are not responsible for Your expenses, license fees,
non-resident appointment fees or taxes.
11.2 Any supplies, manuals or software We furnish to You shall
remain Our property and You will return them to Us upon Our
request.
11.3 You are not Our employee, nor shall anything contained in this
Agreement be construed to create an employee-employer
relationship between You and Us or between Your sub-agents and
Us.
11.4 This Agreement supersedes all prior agreements between us.
11.5 Changes to this Agreement shall be by mutual written agreement.
11.6 This Agreement shall be subject to and construed under the
laws of the State of Washington. If any provision of this
Agreement is found to violate the laws of the United States or
the state in which enforcement is sought, it is agreed that
such provision shall not invalidate the entire Agreement, but
the Agreement shall be construed as if it does not contain the
invalid provision.
11.7 All notices to You shall be sent to Your address shown on the
cover page of this Agreement (AM-1000). All notices to Us
shall be sent to Our local office to the attention of Our
Marketing Manager. Either of us may change their address under
this paragraph by giving the other written notice of the new
address.
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COMMISSION SCHEDULE
PERSONAL LINES
<TABLE>
<CAPTION>
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SAFECO OF FIRST SAFECO OF
ILLINOIS* GENERAL NATIONAL AMERICA
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<S> <C> <C> <C> <C>
AUTOMOBILE
Any automobile rated for a driver under age 21........ 5%* -- 5% 5%
Recreational Vehicle Policy........................... -- -- -- 20%
All other............................................. 10%* -- 10% 10%
PROPERTY
Boatowners............................................ -- -- -- 20%
Dwelling Fire......................................... -- -- -- 20%
Tenant Homeowners..................................... 20%* 20%* -- 20%
Homeowners/Condominiums............................... 15%* 15%* -- 15%
UMBRELLA................................................. -- -- -- 15%
------------------------------------------------------------- ------------- -------------- ------------- -------------
COMMERCIAL LINES
--------------------------------------------------------------------------- -------------- ------------- -------------
(may be negotiated -- not to exceed)
SAFEPLAN SYSTEMS
Package.............................................................. -- -- 15%
Automobile........................................................... -- -- 15%
Workers' Compensation................................................ -- 7% --
Specialty Contractors'............................................... -- -- 15%
PROTECTION PLAN
PACKAGE
General Liability.................................................. 20% 10% 15%
Property........................................................... 20% 20% 20%
Inland Marine...................................................... 20% 20% 20%
EXCEPTIONS:
Earthquake......................................................... 15% 15% 15%
Commercial First Plan.............................................. 15% 15% 15%
GENERAL LIABILITY.................................................... 15% 10% 15%
PROPERTY............................................................. 20% 20% 20%
INLAND MARINE........................................................ 20% 20% 20%
PROFESSIONAL LIABILITY............................................... 20% -- 20%
UMBRELLA............................................................. 15% -- 15%
CRIME, FIDELITY...................................................... 20% 20% 20%
AUTOMOBILE........................................................... 15% 10% 15%
WORKERS' COMPENSATION................................................ To be negotiated -- not to exceed 10%
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</TABLE>
ALL MULTIPLE LOCATION FORM POLICIES, ALL POLICIES WRITTEN UNDER ANY EXCESS RATE
PLAN AND ALL POLICIES COVERING OUTSIDE OF AGENT'S RESIDENT STATE SHALL BE
REFERRED TO THE COMPANY FOR COMMISSION ARRANGEMENTS.
Effective the ____________________ day of ___________________, _______.
Executed this ____________________ day of ___________________, _______.
*SAFECO INSURANCE COMPANY OF ILLINOIS
SAFECO INSURANCE COMPANY OF AMERICA
GENERAL INSURANCE COMPANY OF AMERICA
FIRST NATIONAL INSURANCE COMPANY OF AMERICA
-----------------------------------
(Agency Name) (Stat. No.)
By: /s/ W. Randall Stoddard By:
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W. RANDALL STODDARD, PRESIDENT
*Change Made
