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JBaxLaw
JBaxLaw, Attorney
Category: Business Law
Satisfied Customers: 11314
Experience:  Experienced in business formation and licensing issues
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i am trying to get in to partnership in car insurance business

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i am trying to get in to partnership in car insurance business with a gentlemen who have insurance brokers licence and direct lines with the insurance companyes. i am providing him with space without charging any rent and we agree to spleat commission. i would like to make some kinde of an aggrement with him for one year, and also in case of us spleat i would like to be able to use the lines with the insurance companyes same is he does know. please give me any hints of what the aggrement should say, what is the right way to do this.
Submitted: 4 years ago.
Category: Business Law
Expert:  JBaxLaw replied 4 years ago.
First, you may need a license to split the commission you refer to and you may need a license to do business with the "direct line" insurance contacts. Assuming these are not problems for you, you will want a written agreement. There should be nothing stopping you from continuing to do business with the direct lines to these insurance companies as long as the partner does not interfere. You will want to include an agreement not to interfere with these insurance lines and customers. Be very specific. Include the company names and any new lines acquired while you remain partners.

You should consider including a covenant not to compete. This will need to specify a duration such as one year or two years and be limited in geographical scope. Such agreements which are overly broad are not typically enforceable.

You will also want to include a provision for a specific amount of damages in the event the agreement is breached. Decide if the contract is for a specific duration and how the agreement is renewed. Be sure you have an attorney review your agreement and be sure you retain a copy in a safe location.

Thank you

Please click on the ACCEPT button for my answer so that I receive credit for assisting you. You may continue to ask follow-up questions after accepting. If the information is helpful, I would very much appreciate positive feedback. Bonuses are also appreciated. The responses do not create an attorney-client relationship and are informational only.
Customer: replied 4 years ago.
if i dont have a license at this monent what is the correct way to make the aggrement in regards XXXXX XXXXX
Expert:  JBaxLaw replied 4 years ago.
The applicable law is:

N.Y. Ins. Law § 2115(a) (McKinney 2003 Pocket Part) states:

No insurer doing business in this state, and no agent or other representative thereof, except as provided in subsection (b) hereof, shall pay any commission or other compensation to any person, firm, association or corporation for acting as insurance agent in this state, except to a licensed insurance agent of such insurer or to a person described in paragraph two or four of subsection (a) of section two thousand one hundred one of this article or except as provided in subsection (c) of this section. For the purposes of this section, "acting as insurance agent" shall not include the referral of a person to a licensed insurance agent or broker that does not include a discussion of specific insurance policy terms and conditions and where the compensation for referral is not based upon the purchase of insurance by such person.

The law prohibits you from receiving compensation for acting as an insurance agent. You are not acting as an "agent" if you do not discuss specific policy terms and conditions of a policy. See the italicized section above.

If you are setting up this company as an unlicensed partner, do not discuss policies with customers and avoid receiving compensation based on commissions. You could receive a portion of the business profits in exchange for management and administration functions. The key is that you do not provide any "agent" services. The business can pay you as an owner or manager or simply in exchange for the use of the space.

Thank you

Please click on the ACCEPT button for my answer so that I receive credit for assisting you. You may continue to ask follow-up questions after accepting. If the information is helpful, I would very much appreciate positive feedback. Bonuses are also appreciated. The responses do not create an attorney-client relationship and are informational only.
JBaxLaw, Attorney
Category: Business Law
Satisfied Customers: 11314
Experience: Experienced in business formation and licensing issues
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