NOW VIEWING: Markets Resource Center > Agency-Company Contract Reviews > Companies A-D > Bankers Insurance Group LSA

Bankers Insurance Group LSA


This review Bankers Insurance Group Limited Agency Agreement exclusively focuses on major issues of concern to insurance agencies and does not address general contract issues or provisions of the contract that contain boilerplate language.

Items of concern

  • Requires Agency to establish a premium account with a national bank, but does not allow for a state-chartered bank.
  • Provides for record retention requirements that may be more stringent than state law.
  • Provides that the Agency may lose ownership of expirations for prohibited offenses and/or misconduct of agency principals that is not well defined or does not rise to the level of a criminal offense related to the financial services business.
  • Indemnification provisions are not fair and mutual.

Provision-by-Provision review

Structure corresponds to the lettered and/or numbered paragraphs of the contract (PDF).

1. Limited Authority

1.1 Authorizes agency to service policies that have been submitted to the Citizens Clearinghouse and selected by the Company, or those policies taken out of Citizens by the Company through a depopulation program. 

2. Employment of Producers

2.2. Requires Agency to warrant that it has done background checks and credit checks of all appointed Producers. Many agencies do not do this because they rely on the fact that a Producer has a current license issued by DFS. DFS does background checks and credit checks upon issuance of a license and also is required to be notified of criminal offenses committed by current licensees.

2.4 Requires Agency to notify Company within 3 business days following the termination of employment of any of its Producers that are appointed with or have produced Citizens Policies for the Company.

3. Premium Collection and Remittance

3.1.1 Requires Agency to establish a premium account with a "national" bank if the Company chooses not to direct bill. What if the Agency has an account with a state chartered bank instead?

4. Commissions

4.3. Allows Company to unilaterally amend the commission schedule in its own discretion and with no notice to Agency. However, commissions cannot be any lower than commissions paid by Citizens.

5. System Access and License 

5.2 Specifies that the Agreement does not transfer ownership rights to the Agency of any data in the Agency Portal and that Company reserves all rights. This could be interpreted to interfere with the Agency’s ownership of expirations.

7. Record Retention; Audit

7.1. Requires Agency to maintain all policy documents for 7 years, even if applicable laws provide for shorter retention periods.

8. Term and Termination; Suspension

8.2.3. Allows Company to immediately terminate the Agreement, and may cause the Agency to lose commissions (see 8.3.3) if any of the Agency’s principals engage in misconduct or a “prohibited offense". Misconduct is not defined and a "prohibited offense" (see Exhibit B) includes misdemeanors as well as felonies, some of which are not related to financial services offenses.

8.4. Allows Company to suspend Agency’s authority for any reason or for no reason. This should be better defined.

9. Expirations

9.1. Provides that Agency owns expirations unless the Policyholder selects a new Agent of Record.

10. Confidentiality and Privacy; Nondisparagement

10.1. Requires Agency to comply with privacy laws but does not require Company to do so.

10.3. Requires Agency to refrain from disparaging the Company, but does not require the Company to do the same. 

12. Indemnification

12.1 and 12.2. The indemnification language is not mutual and identical for each party. The Company is not required to indemnify the Agency if the Agency has caused or even contributed to the liability in any way. However, the Agency must indemnify the Company even if the Company has caused or contributed to the liability. To be fair, the language should apply a comparative negligence standard and provide that: “indemnification is required, except to the extent the other party caused or contributed to the liability.”

15. Miscellaneous Provisions

15.8 Handwritten or typewritten changes to this Agreement are void under all circumstances.

FAIA’s Office of the General Counsel provides this contract review only for general information and comments. It is not intended to answer specific individual legal, business, or other questions. It was prepared solely for use as a guide, is not a substitute for the Agent’s/Agency’s independent evaluation of any provision in a contract, and is not a recommendation that the contract be signed, revised, or rejected. Any communication you have with the Company regarding this contract should be an individual communication, and not on behalf of a group of agencies or through FAIA. If specific legal or other expert advice is required or desired, please seek the services of an appropriate, competent professional, such as a licensed Florida attorney familiar with the Florida Insurance Code. 

Reviewed March, 2015 

Current rating: 0 (0 ratings)