Income and other deferred purchase price mechanisms are particularly popular in insurance transactions because of the nature of the transaction. If customers don`t like the new management, they can simply find a new agency. As a result, it is not uncommon for the purchase price to be taken into account in many components, particularly in smaller transactions with an increased risk of consumer wear and tear. Therefore, in order to adequately protect the Agency`s bloods, sweats, tears and tears, it is customary for producer agreements to contain provisions relating to the “ownership of Expirations or Renewal policy” that give the Agency the right to renew its client accounts at the end of the policy, unless the Agency is late in accordance with the current agency agreement. Any potential purchaser of an insurance agency likely suspects that the Agency must have certain licenses, both residents and non-residents. But which licenses should be kept exactly and who should hold them? Typically, an agency must license an insurance agency, broker or production company when that agency sells, solicits and/or negotiates insurance (some states do not have licensing requirements for businesses). This requirement also applies when the Agency is active in wholesale trade in a Member State, with regard to the investment of insurance between a consumer`s insurance broker and an insurance company. While appropriately worded submissions, guarantees and compensation rights may help to limit this exposure, a thorough understanding of an agency`s performance and potential recovery obligations can also have an impact on the Agency`s assessment. Insurance agencies also often use fictitious or commercial names, commonly referred to as “DBA.” DBA names often need to be registered with the appropriate insurance services and often cannot contain specific words or words that may be misleading or subordinate to membership in other government agencies or units. Therefore, an appropriate duty of care will also allow for the analysis of any problems with DBA. In addition, some agencies occupy aggressive positions by characterizing their agents as independent contractors for compensation, social benefits, taxation and other accounting purposes.
It is important to carefully consider whether the activities of an individual Agency representative require the representative to be considered an employee or an independent contractor. An agency`s insurance does not like to be taken for granted when selling an agency. Most agency agreements have provisions to notify the insurance company when an agency`s assets are sold or when the Agency merges with another agency. The agency agreement often states that the agency contract ends if the insurance company refuses to accept the sale, merger or transfer of assets. If the sustainability of one or more agency contracts held by the agency for sale is essential to the agreement, contact the parties with the seller`s written permission and ensure that the new contract is signed with the new owner of the Agency.