Access Duration from the Date of Purchase: 6 months
Credit Hours: 2
Credit Type: General/Adjuster – Technical and RIBO Management
Credit #: AIC #48002; MB#30087
Accrediting Provinces: BC, AB, SK, MB, ON
SAMPLE EXCERPT FROM COURSE
Once the scouting and mutual appraisals are completed between insurers and brokers, they enter into a formal agreement with one another. The agreement is the document, but the vital component of the connection is a relationship. When the relationship is strong one, and a “good fit” it can result in a satisfactory and profitable partnership. Good relationships, built on trust and commitment, require fluid and precise communication. Both parties need a clear understanding of their terms of relationship and a means of resolving any issues that might arise.
The Formal Agreement
Particular items are included in formal agreements between Insurers and brokers. These items are identified and explained below.
OVERVIEW OF A BROKER AGREEMENT
Table of contents for Broker Agreements
Identification of Parties and Date of Agreement
Definition of Specific Terms in Agreement
Item 1 Contract Term
Item 2 Restrictive Covenants
Item 3 Broker’s Responsibilities
Item 4 Limitation of the Broker’s authority
Item 5 Expirations and Portfolio Ownership
Item 6 Broker’s Remuneration
Item 7 Direct Billed Policies
Item 8 Broker Billed Policies
Item 9 Hold Harmless Clause
Item 10 Contract Assignment
Item 11 Restoration of Broker-Company Relationship
Item 12 Termination
Item 13 Restricted Brokerage Agreement
Item 14 Dispute Resolution
Item 15 Miscellaneous
Item 16 Electronic Interface
Item 17 Confidentiality and Privacy
Item 18 Contingent Commissions
Signature Page
Name of Insurance Company
Address of Insurance Company
This agreement entered into ________________________ , 20_____
Between: The ABC Insurance Company of Canada (“the Company”) and XYZ Broker (“the Broker” – Address of the Broker)
witnesses that in consideration of the mutual covenants of the parties herein contained, the parties hereto agree as follows:
Definition of Specific Terms in Agreement
The following definitions apply to all Broker Agreement documents.
- i) Company
The Company is the undersigned insurance company or companies.
- ii) Broker
The “Broker,” or “you” and “your” means the Broker/Brokerage and/or its employees. The Broker is the undersigned person, and may be the authorized individual or legally authorized person representing a partnership or corporation.
iii) Binder
The binder is the temporary agreement that will provide insurance coverage until the policy can be produced and delivered.
- iv) Policy
The term “policy’ refers to the written contract of insurance.
- v) Double Registered Mail
Double registered mail is a form of registered mail providing the sender with a confirmation when the documents are delivered to the addressee or another person on behalf of the addressee.
Items in the Broker Agreement
- Contract Term
The agreement will state the period of the time the contract covers, unless terminated earlier.
Termination of the contract term is subject to the provisions outlined in Item 11. The recommended time frame for termination is generally a period of 180 days.
- Restrictive Covenants
A covenant is an agreement. It will become the responsibility of the Broker to ensure the various covenants in the Broker Agreement will apply to all the staff and brokers employed by the party signing the contract. The covenants must be reasonable in order to be legally enforceable.
- Broker’s Responsibilities
This item will outline in detail the authority of the Broker and will make reference specific responsibilities of the broker. Examples of the type and variety of authority and responsibilities are shown as follows:
- To solicit applications for insurance contracts.
- To transfer to the Company monies collected; all premiums or other amounts payable in respect of the Contract established under the terms that apply.
- To obtain and renew the licenses required to sell insurance.
- To maintain errors and omissions insurance as required.
- To be responsible for the actions and behaviour of employees and representatives and their training, including the monitoring and supervising of their activities at the brokerage’s own cost and expense.
- To conduct the business activities of the Brokerage in accordance with the highest ethical standards and comply with all federal and provincial laws.
- To observe and respect the Company’s Code of Ethics.
- To observe and respect the Company’s instructions, rules and regulations as they relate to the customer services activities provided to clients.
- To agree to attend the informational and training sessions offered by the Company that deal with its Code of Ethics, Policies and procedures and/or other matters of importance relating to compliance and market conduct matters.
- To deliver to the Company without delay all applications, binders, changes, cancellations, policies and endorsements received.
- To maintain proper and accurate accounts of all the transactions that relate to the Company and agree to provide these to the company upon their request.
- To deliver to the Company without delay any and all claims or complaints the Broker is made aware of that relate to the Company or products/services it provides.
- To deliver to the Company without delay upon request any property, including computers and software, manuals, forms and material that has been supplied by the company.
- To repay any remuneration to the Company that belongs to it as defined by the terms of this agreement.
- To communicate requests to cancel policies and binders where it is legally permissible to do so.
- To sign policies of insurance on behalf of the Company.
- To obtain the company’s prior written permission to use its name in advertisements and marketing.
- To permit the Company or its representatives to visit the Broker during normal business hours in order to examine the business of the Broker and its records that pertain to the Company.
- To comply with all regulations stipulated by the Company and government authorities for preventing money laundering activities.
- To treat all personal information gathered in such a way as to comply with the Company’s confidentiality policies.
- To handle all personal information gathered in such a way as to comply with federal and provincial Privacy Laws.
- Limitation of the Broker’s authority
The Broker’s authority is limited by the terms expressed herein. Without limiting the generality of what has just been stated, it is agreed the Broker does not have the authority to do any of the following:
- a) To incur liability, debt, expenses, or any similar liability on behalf of the Company.
- b) To create, change or cancel contracts on behalf of the Company,
- c) To waive forfeiture rights or bind the Company in any form to terms not specifically authorized in writing by a duly authorized representative of the Company.
- d) To alter or adjust any premium rate circulated by the Company.
- e) To rebate all or any portion of a premium paid.
- f) To begin or threaten to begin any legal action against a third party with respect to any matter emerging from, or associated with the actions of the Broker as they pertain to the Company.
- e) To allocate to others the rights or benefits contained in this Agreement.
- f) To create, copy, use or otherwise allow to be circulated or displayed any marketing, advertisement, brochure, product illustration or other material related to the Company.
- g) To copy, use or advertise the trade-mark of the Company and its logo in any fashion or form without written authorization from the Company.
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