Exhibit 10.6
AGREEMENT made this 1st day of May, 1987.
B E T W E E N:
PAFCO GENERAL INSURANCE COMPANY
(hereinafter designated as the "Company")
- and -
SYMONS INTERNATIONAL GROUP, INC.
(hereinafter designated as the "Manager")
IN CONSIDERATION of the mutual covenants and premises
contained herein the parties hereto agree.
1. The Company hereby grants to the Manager authority to act on behalf of the
Company in all States of United States of America in which the Company carries
on business to receive and accept proposals for insurance covering such classes
of risks as set out in Addendum "A" attached hereto and forming part of this
contract as may from time to time be amended.
2. The Manager has full authority and responsibility to collect and receive on
behalf of the Company payments for premiums for such insurance but all such
payments shall be made payable to the Company.
3. The Company hereby grants to the Manager authority to, on behalf of the
Company, receive and accept proposals for contracts, to appoint adjusters,
adjust and settle claims on
-2-
behalf of the Company and to do all those things required to be done by the
Company in fulfilling its obligations to the public, the Department of Insurance
or other government bodies.
4. The powers granted by the Company to the Manager hereunder are on an
exclusive basis and during the currency of this Agreement the Company shall not
act on its own in respect of any matter delegated to the Manager hereunder.
5. In consideration of the Manager performing its duties hereunder and as
compensation for such business as is placed with the Company, the Company agrees
that out of premiums so collected, delivered and deposited to the account of the
Company, the Company shall pay to the Manager fees at rates as set out in
Addendum "A" attached hereto or as may from time to time be amended in writing.
6. The Company hereby appoints and constitutes the Manager as its legally
designated Manager throughout the United States of America and hereby conveys
and confers to the Manager the powers authorizing him to take all the actions
necessary so as to enable the Manager to perform its duties hereunder.
7. Particularly, but without limitation, the Manager is hereby empowered to, on
behalf of the Company:
(a) receive, demand, seize, institute proceedings for
recovery and recover any and all premiums, debts or
other sums which are presently or which shall become
in the future due and payable to the Company provided
-3-
that, in respect to all premiums, payments shall
be made directly to the Company and in respect to
all other debts or sums recovered shall be paid
forthwith to the account of the Company;
(b) open and maintain, in the name of the Company,
one or several accounts in any bank or trust
company and draw on such accounts for and on
behalf of the Company and, to that end, endorse
cheques and bills of exchange so as to effect
deposits in said accounts in the name and on
behalf of the Company; but it is expressly
stipulated that the Manager does not have the
authorization to overdraw or to negotiate
and/or obtain a loan, on pledged security or
otherwise, or pay any sum on its own account
without a special authorization from the
Company;
(c) receive and/or cash and deposit forthwith to
the account of the Company any dividend,
interest or other sums of money related to or
connected with securities forming a part of the
activity of the Company in the United States of
America whether provided by law or as a result
of contracts or trusts or otherwise, within the
limits authorized by law;
(d) solicit authorizations of any Department of
Insurance or other governmental bodies and
solicit the renewal and modification of such
authorizations and, to this end, constitute
-4-
deposits of securities or other properties, as may be
required, and draw up and execute, on behalf of the
Company, all required documents to that end and also:
(i) solicit, if need be, the arbitration of
a civil servant of the Department of
Insurance or other civil servant;
(ii) draw up and execute, on behalf of the
Company, any declaration as to its
solvency or any other document required
by law;
(iii) generally, to that end, do whatever is
necessary and draw up and execute any
other document which may be required from
the Company.
(e) establish and verify the annual accounts and
other financial documents required by the laws
and regulations of any jurisdiction in the
territory of which the American branch of the
Company is authorized to do business, in
addition to any other documents and reports
required to be furnished pursuant to such laws
and regulations; and in the event that it will
be necessary that such reports or documents be
drawn up by two persons, appoint an agent in
such territory as representative of the Company
with the necessary powers to establish such
reports or documents;
-5-
(f) Communicate with the Department of Insurance in
the State of Indiana or of any state,
territory, or district therein or thereof or
with any other persons any such state,
territory or district, as provided by law and,
on behalf of the Company, accept and
acknowledge the receipt of service of a notice
or proceeding of any kind, either provisional
or definitive in any judicial proceeding
against the Company, in any Court of Justice of
the United States of America or of any state,
territory or district therein of thereof, and
appoint and admit, on behalf of the Company
that a decision taken by the Department of
Insurance or other qualified person be
considered as valid and obligatory and binding
upon the Company pursuant to the laws and
customs of the United States of America or of
the states, territories or districts therein or
thereof.
8. The parties agree that all books and records relating to the Company's
business including those maintained for its and on its behalf by the Manager
shall remain the property of the Company and shall be kept at the Company's head
office. Furthermore, all business effected on the Company's account by the
Manager shall be the property of the Company and the Manager shall have no
rights thereto except in accordance with this Agreement.
9. The Company agrees to hold the Manager harmless and to indemnify the Manager
in respect to all claims including the cost of defense arising out of loss to
policy holders
-6-
caused directly by the Company's error in the processing or handling of policies
and further agrees to hold the Manager harmless and indemnify the Manager for
actions of the Company which result in loss or damage to the Manager.
10. The Manager is an agent of the Company and the Company agrees to indemnify
the Manager for all actions taken by the manager on behalf of the Company in
accordance with its duties hereunder.
11. This Agreement shall be for a period of five years commencing on the date
first written above and shall be automatically renewed for further periods of
three years each unless a notice in writing to the contrary shall have been sent
by either party to the other by prepaid mail at least sixty days prior to
December 31 of the end of the term or any renewals. Notwithstanding the
foregoing, either party may terminate this agreement upon sixty days notice in
writing delivered by prepaid mail to the other party.
12. Any notice required or permitted hereunder shall be deemed to be validly
sent if sent to the following addresses:
(a) In the case of the Company:
4720 Kingsway Drive
Indianapolis, Indiana 46205
(b) In the case of the Manager:
4720 Kingsway Drive
Indianapolis, Indiana 46205
-7-
Any such notice addressed as aforesaid and sent by prepaid mail shall be
conclusively deemed to have been received on the fifth business day after such
mailing. Either of the parties may advise the other in writing of any change of
address by the giving of notices.
13. It is expressly understood and covented that the Manager shall not in any
way assign, cede or transfer this Agreement without the written consent of the
Company.
14. This Agreement shall be governed by the laws of the State of Indiana.
IN WITNESS WHEREOF the parties hereto have executed this Agreement by
officers duly authorized in that behalf.
PAFCO GENERAL INSURANCE COMPANY
PER: /s/Alan G. Symons
-----------------------------
SYMONS INTERNATIONAL GROUP, INC.
PER: /s/ Alan G. Symons
-----------------------------
Dated at Toronto,
this 14th day of October,
1987.
ADDENDUM A
SCHEDULE OF CLASSES AND FEES
The Manager shall receive fees for the business placed with
the Company in accordance with the following:
CLASS FEES
(% of Gross Written Premiums)
Automobile Agents commission plus 23.5% not
to exceed 38.5% in total.
Property Agents commission plus 23.5% not
to exceed 38.5% in total.
Liability Agents commission plus 23.5% not
to exceed 38.5% in total.
Accident & Sickness Agents commission plus 23.5% not to
exceed 38.5% in total.
When the Manager has elected to place reinsurance on behalf of
the Company, the reinsurance shall have a ceding commission payable to the
Company of at least the commission payable to the Manager plus taxes plus the
agents' commissions or the commission payable to the Manager shall be reduced
proportionate to the amount of the commission for reinsurance.