Service Contract
Version: June 27, 2000
Prepared by:
Jeffrey L. Nogee, Esq.
Nogee & Wartel
The Roosevelt Building
900 Ellison Ave., Suite 211
Westbury, NY 11590
516-222-6575
JNogee@aol.com
The following is a sample form of agreement. It is not intended to provide legal advice. Before entering into any contract, you should consult an attorney experienced in the subject matter.
Insurance Service Contract
This Agreement is entered into and made effective as of ____________, 19__, by and between ________________________________ ("Client"), residing at ______________________________, and __________________________ ("Agent"), a life insurance agent licensed to sell life insurance in the State of ___________ with offices at ______________________________________.
RECITALS
Agent is desirous of selling a policy of life insurance to Client.
As an inducement to Client to purchase a policy of life insurance through Agent, Agent is willing to provide various services to Client in connection with obtaining and maintaining such insurance policy.
Client is interested in purchasing a policy of life insurance through Agent, subject to the following terms and conditions.
NOW, THEREFORE, in consideration of the premises and mutual promises made in this Agreement, the parties have agreed as follows:
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Prior to executing an application for life insurance, the Agent shall provide and disclose to the Client the following:
the fact that the Agent will receive commissions from the company issuing the life insurance policy ("Insurer");
the amount of the anticipated first-year commissions, renewal commissions and any other compensation that is directly related to the policy purchase (such as expense allowances);
whether the Insurer has similar products to the one being offered to the Client which may have features more favorable to the Client;
whether the policy values can be improved through the use of blended designs or other alternatives and what such alternatives are; and
the financial strength ratings and full reports about the proposed Insurer from the major rating agencies, including A.M. Best, Duff & Phelps, Moody's, and Standard & Poor's, and any other sources which the Agent may deem appropriate or which the Client may request.
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After execution of the application for life insurance through the end of the "free look" period, the Agent shall provide and disclose to the Client all of the information described in Paragraph 1(a) through (e) above, updated to the date of delivery of the policy to the Client.
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Upon issuance of the policy of life insurance, the Agent shall promptly deliver the policy to the Client, and in any event no more than five (5) business days prior to the expiration of the "free look" period described in the policy. If the policy is to be provided directly from the Insurer, the Agent shall use his best efforts to ensure that the Client receives the policy at least five (5) business days prior to the expiration of the "free look" period.
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Prior to the expiration of the "free look" period, the Agent shall verify that the Insurer has recorded the policy ownership and beneficiary designations in accordance with the Client's instructions.
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After expiration of the "free look" period, and for so long as the policy remains in effect including any cure period following lapse for any reason, the Agent shall:
forward to Client all notices received by the Agent or of which the Agent becomes aware concerning the policy issued to the Client;
at least annually, provide the financial strength ratings and full reports about the Insurer from the major rating agencies, including A.M. Best, Fitch, Moody's, and Standard & Poor's, and any other sources which the Agent may deem appropriate or which the Client may request;
at least annually, report to the Client in writing any changes in nonguaranteed elements of the policy since its date of issue, including without limitation changes in the dividend scale, credited interest rate, cost-of-insurance rates, and expense charges;
upon request of Client, provide, or assist Client in obtaining, an in-force policy illustration based on current assumptions or other specified assumptions;
upon request of Client, explain, or assist Client in obtaining an explanation of, the contract, policy illustrations, and other documents related to the policy;
for fixed-premium and flexible-premium variable life policies, provide the Client with information on subaccount performance, using an appropriate independent source such as Morningstar. This information may include absolute rates of return for various periods, performance relative to similar subaccounts in other variable products, risk measures, and changes in investment style;
perform these additional services that Agent and Client have agreed to:
______________________________________________________
______________________________________________________advise the Client of any programs which the Insurer may offer or develop that might be beneficial to the Client, such as coverage increases with simplified underwriting or contract changes; and
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maintain at his or her usual place of business accurate accounts, books and records concerning all policies issued to the Client which were obtained by or through the Agent or for which the Agent receives any commission or other form of compensation or benefit, including without limitation:
copies of each policy so issued;
the name and address of the Insurer; and
copies of all claims, requests for surrender and other matters submitted by the Agent to the Insurer on behalf of the Client or otherwise related to each such policy.
maintain, in the event the Agent discontinues conducting his or her business as an insurance agent, all such records as required under subparagraph 4.i until the later of the time when the Agent has discharged all obligations to the Client under this Agreement or until a successor Agent has been named and accepted by the Insurer and the Client.
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In providing any information to Client or performing any services in connection with the policy issued or other insurance policies or products which the Agent may offer or discuss with Client, the Agent shall not:
permit or cause to be made by anyone acting on his or her behalf any false or misleading statements or deliberately omit any material statement that would make the information, policy or product misleading if omitted; nor
require the purchase of any other policy, product or service as a condition of any policy or product being offered or provided.
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If the Agent fails to fulfill any of his duties ore responsibilities under this Agreement, the Client may exercise any one or more of the following remedies:
Client may request of the Insurer that the Agent be replaced by another agent representing the Insurer;
Client may request of the Insurer that all future commissions or servicing fees of the Agent shall be redirected to another agent representing the Insurer;
Client may seek redress against the Agent for breach of this Agreement by initiating arbitration pursuant to the rules of the American Arbitration Association then in effect.
The foregoing remedies are cumulative and non-exclusive.
All notices and correspondence shall be given in person or by certified mail to the parties at the addresses above. Either party may change the address to which notices shall be given by written notice to the other.
If any provision of this Agreement or part thereof shall be held to be invalid, the remaining provisions and portions shall not be affected and shall remain in full force and effect as if such invalid provision or portion did not exist.
This Agreement may not be modified or amended except by an agreement in writing signed by both parties.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date and year first above written.
Client
Agent