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Agency Producer Agreement

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AGENCY PRODUCER AGREEMENT

This Agency Producer Agreement ("Agreement") is made and entered into as of Effective Date: by and between Principal Name: with principal address and Producer Name: with address .

RECITALS

WHEREAS, Principal is engaged in the business of underwriting, marketing and administering insurance products and desires to engage Producer to solicit applications for and place business in accordance with the terms of this Agreement; and

WHEREAS, Producer is duly licensed, qualified and experienced to solicit and service business for Principal in the Territory: ; and

WHEREAS, the parties desire to set forth their respective rights and obligations with respect to the solicitation, placement and servicing of policies and the payment of commissions.

NOW, THEREFORE, in consideration of the mutual covenants and agreements contained herein, the parties agree as follows:

1. APPOINTMENT

1.1 Appointment. Principal appoints Producer, and Producer accepts appointment, as a non-exclusive/exclusive (select applicable) producer to solicit applications for the insurance products described in Exhibit A and to service policies issued by Principal in the Territory specified above. Selection between non-exclusive or exclusive appointment is evidenced by selecting the applicable box below.

Non-Exclusive Exclusive

2. TERM

2.1 Term. The term of this Agreement shall commence on the Effective Date and shall continue for a period of months, unless earlier terminated in accordance with Section 10. Thereafter this Agreement shall renew automatically for successive periods of months unless either party provides written notice of non-renewal at least days prior to the expiration of the then-current term.

3. PRODUCER OBLIGATIONS

3.1 Licenses and Qualifications. Producer represents and warrants that it holds and will maintain all licenses, appointments and registrations required by applicable law to solicit and place business for Principal. Producer shall promptly provide copies of such licenses and any changes thereto to Principal upon request.

3.2 Solicitation and Records. Producer shall solicit applications in accordance with Principal's underwriting and submission guidelines, shall not bind coverage on behalf of Principal except as expressly authorized in writing, and shall maintain complete and accurate records of all transactions, policies, premiums, and communications for a period of months following the relevant transaction.

4. AUTHORITY AND LIMITS

4.1 No Authority to Bind. Producer has no authority to modify coverage terms, waive or alter underwriting requirements, incur liabilities or accept service of process on behalf of Principal, except to the extent expressly set forth in writing. Any such unauthorized acts shall be at Producer's sole risk and expense.

5. COMPENSATION; COMMISSIONS

5.1 Commission Schedule. Principal shall pay Producer commissions in accordance with the schedule set forth in Exhibit A. Standard commission for the products covered by this Agreement is % of earned premium, subject to adjustments for cancellations, short rates, retrospective adjustments and chargebacks as described below.

5.2 Payment Terms. Commissions shall be paid within days following Principal's receipt of premium and accounting for any required premium finance, return premiums, or policy adjustments. Payments shall be remitted to Producer at the address or bank instructions on file with Principal.

6. REPORTING; AUDIT

6.1 Reports. Principal shall furnish Producer with periodic statements showing premiums written, earned premiums, commissions earned, chargebacks, endorsements and cancellations. Producer shall review such statements and notify Principal in writing of any dispute within days of receipt; thereafter the statement shall be deemed correct.

6.2 Audit. Principal, or its designee, shall have the right upon reasonable notice and during normal business hours to audit Producer's records relating to business placed under this Agreement. Any audit shall be conducted no more frequently than once annually unless reasonable cause exists.

7. CONFIDENTIALITY

7.1 Confidential Information. Producer shall hold in confidence and shall not disclose or use for any purpose other than performance under this Agreement any non-public business, technical or customer information of Principal, including policyholder data, trade secrets and underwriting files ("Confidential Information"), except as required by law. Confidentiality obligations shall survive termination of this Agreement for a period of months.

8. INSURANCE; INDEMNITY

8.1 Insurance. Producer shall maintain, at its expense, errors and omissions insurance with limits of not less than and shall furnish certificates evidencing such coverage upon request. Producer's insurance shall be primary and non-contributory with respect to claims arising from Producer's acts or omissions.

8.2 Indemnification. Producer shall indemnify, defend and hold harmless Principal, its affiliates and their respective officers, directors and employees from and against any claims, liabilities, losses, damages, costs or expenses (including reasonable attorneys' fees) arising out of Producer's negligence, willful misconduct, breach of this Agreement or violation of law.

9. NON-SOLICITATION

9.1 During the term of this Agreement and for a period of months following its termination, Producer shall not, directly or indirectly, solicit for placement with any competing insurer any policyholder of Principal with whom Producer had material contact or obtained Confidential Information in connection with the services provided under this Agreement.

10. TERMINATION

10.1 Termination for Convenience. Either party may terminate this Agreement without cause upon days' prior written notice to the other party.

10.2 Immediate Termination. Principal may terminate this Agreement immediately for cause upon written notice in the event of Producer's material breach, fraud, willful misconduct, revocation or suspension of required licenses, or failure to maintain required insurance.

10.3 Effect of Termination. Upon termination, Producer shall cease solicitation of new business for Principal. Producer shall cooperate in the orderly transfer of active accounts and return all Confidential Information. Commissions on policies in force at the time of termination shall be paid in accordance with the terms of Exhibit A, subject to setoffs for refunds, cancellations and debts owed to Principal.

11. NOTICES

11.1 All notices, demands, or other communications required or permitted under this Agreement shall be in writing and delivered by hand, nationally recognized overnight courier, certified mail (return receipt requested), or electronic transmission with confirmed receipt, to the addresses set forth below or to such other address as either party may designate by written notice in accordance with this Section.

12. COMPLIANCE WITH LAW

12.1 Compliance. Each party shall comply with all applicable federal, state and local laws, rules and regulations in the performance of this Agreement, including licensing, anti-money laundering, privacy, and data protection requirements. Producer shall not engage in any conduct that would jeopardize Principal's regulatory standing.

13. AMENDMENTS; WAIVER

13.1 Amendments. No amendment, modification or waiver of any provision of this Agreement shall be effective unless made in a written instrument signed by authorized representatives of both parties.

13.2 Waiver. No failure or delay by either party in exercising any right under this Agreement shall operate as a waiver of that right, and no single or partial exercise of any right shall preclude other or further exercise of that right.

14. GOVERNING LAW; VENUE

14.1 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of without regard to its conflicts of law principles. Venue for any dispute arising out of this Agreement shall lie exclusively in the state or federal courts located in the same state.

15. ENTIRE AGREEMENT; SEVERABILITY

15.1 Entire Agreement. This Agreement, including any exhibits and schedules referenced herein, constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior and contemporaneous oral or written agreements, representations or understandings.

15.2 Severability. If any provision of this Agreement is held invalid or unenforceable by a court of competent jurisdiction, the remaining provisions shall remain in full force and effect and the parties shall negotiate in good faith a replacement provision to carry out the original intent.

16. COUNTERPARTS; ELECTRONIC SIGNATURES

16.1 Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original and all of which together shall constitute one and the same instrument. Electronic signatures and transmission of executed counterparts by electronic means shall have the same force and effect as original signatures.

17. ADDITIONAL PROVISIONS

Principal Printed Name:

By:

Date:

Title:

Producer Printed Name:

By:

Date:

Title:

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What an Agency Producer Agreement Covers

An Agency Producer Agreement is a written contract that defines the legal relationship between an insurance agency and an appointed producer (agent). It allocates rights and responsibilities such as lines of authority, appointment and contracting procedures, commission schedules, territory and product scope, licensing obligations, confidentiality, and termination terms. The agreement also specifies reporting, payment and recordkeeping duties and any post-termination obligations like non-solicitation or commission reconciliation. Clear execution and retention rules reduce regulatory and tax exposure for both the agency and the producer.

Why a Clear Agreement Matters

A formal agreement clarifies expectations, preserves commissions, and creates enforceable obligations under state insurance law and contract principles. It protects agency assets, documents licensing and appointment status, and reduces disputes over compensation and customer ownership.

Why a Clear Agreement Matters

Who Typically Signs and Uses This Agreement

Agency owners, managing general agents, licensed producers, and compliance officers commonly use this agreement to document appointments and pay arrangements.

  • Licensed Producers — Independent or captive agents responsible for soliciting and servicing business under the agency’s appointment and supervision.
  • Agency Principals — Owners or officers who bind the agency, manage producer appointments, and oversee commission payments and compliance.
  • Compliance & Finance — In-house or external compliance officers and payroll staff who verify licenses, report commissions, and reconcile payments.

The document also serves carriers, payroll teams, and auditors who need a clear record of producer authority and commission terms.

Core Clauses to Include

A professional Agency Producer Agreement groups operational, financial, and legal terms so responsibilities are clear and enforceable across parties and regulators.

Appointment Clause

Defines the carrier lines, products, and authority level granted to the producer; explains appointment mechanics and any carrier filings the agency will perform on behalf of the producer.

Commission Schedule

Sets commission rates, payment timing, chargebacks, overrides, and reconciliation procedures; specifies handling of refunds, cancellations, and adjustments to avoid later disputes.

Licensing & Compliance

Requires the producer to maintain state licenses, disclose disciplinary actions, and provide current license numbers. States and carriers may require prompt notification of changes.

Territory & Customers

Defines geographical or market territory, rules for customer ownership, prospect assignments, and non-solicitation obligations after termination.

Termination & Effects

Specifies cause and convenience termination mechanics, notice periods, effect on commissions, and post-termination reconciliation and reporting obligations.

Confidentiality & Indemnity

Protects proprietary agency data, requires appropriate insurance or indemnity for negligent acts, and limits agency exposure from producer misconduct.

Step-by-Step: Completing and Executing the Agreement

Follow this order to create a compliant, executable agreement and streamline carrier appointment and payroll steps.

  • 01
    Draft Terms: Define appointment, commissions, territory, and termination clauses in plain language.
  • 02
    Verify Licenses: Confirm active state licenses and enter license numbers before signing.
  • 03
    Customer Ownership: Clarify ownership and post-termination servicing rights to avoid disputes.
  • 04
    Sign and File: Have authorized parties execute, then file with carriers and retain copies for records.

How to Amend or Update an Existing Agreement

Use a controlled amendment process to ensure changes are binding and tracked across systems.

01

Prepare Amendment:

Draft a short amendment specifying replaced sections and effective date.
02

Obtain Approvals:

Get signatures from the same authority level required for original execution.
03

Update Systems:

Replace contract version in repository and update payroll/carrier records.
04

Notify Parties:

Send signed amendment to carrier, producer, and relevant teams.
05

Retain Records:

Keep both original and amendment per retention policy.
06

Reconcile Commissions:

Run a reconciliation covering the amendment effective date forward.

Configuring an Online Approval and Signing Workflow

Set up a digital workflow that mirrors required signatory order and authentication steps to reduce friction and ensure legal validity.

Field Configuration
Signing Order Sequential order: Agency principal then producer
Authentication Email plus optional SMS code for higher assurance
Attachments Attach current license and W-9 before routing
Audit Trail Enable timestamps, IP, and signature certificate logging

Where to Send Signed Agreements

After execution, route copies to all stakeholders and update carrier appointment records promptly.

  • Agency Records: Keep the signed original in your central contract repository.
  • Producer Copy: Send an executed PDF to the producer for their records.
  • Carrier Appointment: Submit required forms and the executed contract to the carrier as needed.
  • Regulatory Filing: File notices or appointments with state DOI when the state requires it.

Digital Signing and File Format Guidance

Ensure your eSignature provider supports retention of audit trails and can export signed documents in PDF/A for long-term storage.

  • Formats Supported: PDF, DOCX, HTML, Excel
  • Integrations: Salesforce, NetSuite, Microsoft 365, Google Workspace
  • Authentication Options: Email, SMS, KBA, SSO

Essential Information to Capture

Producer License: State license number
Legal Name: As on license
Tax ID: EIN or SSN
Effective Date: MM/DD/YYYY
Commission Terms: Percent or schedule
Signatures: Signer name and date

eSignature Vendor Pricing Snapshot

Compare typical starting prices and key feature points for common eSignature providers relevant to executing Agency Producer Agreements.

signNow DocuSign Adobe Sign PandaDoc HelloSign
Starting Price $8/user/mo $15/user/mo $14/user/mo $19/user/mo $15/user/mo
Free Trial 7-day free trial Varies Varies Varies Varies
Bulk Send Yes Yes Yes Yes Varies
Audit Trail Yes Yes Yes Yes Yes
HIPAA Compliant Yes Yes Yes No No
Envelope Cap No cap 100 envelopes/user/year Varies Varies Varies

Common Preparation Errors to Avoid

  • Missing or incorrect license numbers that block carrier appointment and delay commission payments for weeks or longer.
  • Vague commission language that omits chargeback rules or treatment of cancellations, creating later reconciliation disputes.
  • Failure to specify governing law and dispute resolution, which can increase litigation risk and venue disputes.
  • Not aligning contract signing order and authentication with carrier or state requirements, invalidating filings or delaying processing.

Risks and Potential Consequences

License Suspension: Regulatory action
Commission Loss: Forfeiture or chargebacks
Regulatory Fines: State DOI penalties
Tax Exposure: Withholding or reporting errors
Contract Dispute: Civil litigation risk
Data Breach: PII exposure and compliance costs

Typical Timing and Processing Expectations

Timelines vary by carrier and state; use these typical milestones to plan onboarding and commission flows.

Execution Date:

Agreement effective on the signed effective date

Carrier Filing:

Carrier appointment filing time varies from days to weeks

Commission Start:

Commissions usually payable after policy issue and premium receipt

Reconciliation Cycle:

Monthly or quarterly reconciliations are common

License Renewal:

Renew promptly per state schedule to avoid gaps

Who Typically Signs and Binds the Agreement

Agency Principal

The agency owner or authorized officer who has corporate authority to enter contracts. This signer accepts responsibility for filing appointments, issuing commission payments, and maintaining required insurance and corporate registrations.

Producer / Agent

A licensed insurance producer who accepts appointment and commission terms. The producer must maintain active licensing and notify the agency of any disciplinary or licensing changes during the contract term.

Frequently Asked Questions

Answers to common legal, signature, and filing questions to reduce uncertainty during preparation and execution.


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