The Independent Agent`s “Agency Enterprise Agreements Checklist” was first published in 1978 as the Guide to Agency Company Agreements and revised in 1981 and 1985. The Agency Contracts Committee of the Independent Insurance Agents of America, Inc. decided it was time to take a look at the agency`s enterprise agreements, as this is a dynamic area where contractual provisions are changing, due to new problems and conflicts in the relationship between the agency and businesses. The agency`s layoffs will always be a critical concern for agents. Regardless of whether the market is soft or hard, companies seem to aggressively “refine” their agency facilities. A new problem for agents are the company`s service centers. Whether it is a separate agreement or a basic contract endorsement, service centre contracts must also be thoroughly audited. The agreements currently in use are short and simple, but they tend to lack important guarantees. Under today`s agreements, amendments to the agreements are generally achieved in two ways.

First, most contracts can be changed unilaterally by the company with an average delay of ninety (90) days. Second, the representative and the company may agree in writing at any time to amend the contract. Since treaties should reflect the “meeting of minds,” the Committee recommends that changes be made only between the agent and the company. The Committee recommends that the agreements contain a specific language with respect to the service information to which the agent and the agent are entitled, permanently and in the long run. In addition, the agreement should clearly address the issue of agent ownership in expiry operations before, during and after the use of a service centre. The work of the agency contracts committee will continue. Through this guide and the contract seminars that the Agents Committee organizes across the country, the Committee continues its crusade to train agents to ask their companies for fair agency agreements. When the Agency is a company, the company often contains a personal guarantee under the contract. A personal guarantee generally states that the person signing the warranty is personally responsible for the warranty. This could lead to the signatory`s personal assets being subject to a judgment against the Agency if the Agency does not pay the judgment.

It is recommended that the personal warranty of the agreement be completely removed. If the representative represents a company without arbitration in its agency agreement, the company should ask the company to notify in writing its dispute resolution procedures. Temporary agreements with rollover features enhance security and stability in the relationship between agent and business, benefiting the insurance consumer for better, uninterrupted service. Such agreements would also assist agents and businesses in their mutual business planning. If termination is unavoidable, there are certain safeguards that should be included in the Agency`s agreement. There should be a provision allowing the officer to prescribe, at least 180 days prior to termination, a written notification indicating the specific reasons for termination.