Copyright © 2011 The Capacity Group, Inc., All rights reserved.
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Copyright © 2011 The Capacity Group, Inc., All rights reserved. |
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FEE AND COMMISSION DISCLOSURE
The Capacity Group of Companies (Capacity) may be compensated for our work in a variety of ways, including the following:
Client Fees: In some cases, our clients pay us negotiated fees for handling their insurance needs. Any such fees to be paid by the client are set forth in the written agreement between Capacity and our client.
Regular Commissions: Insurance companies with which we place business generally pay us commissions for the placement or renewal of policies. In most cases, such commissions are calculated as a percentage of the premium paid to the insurance company for the specific policy and are included in our client’s premium cost. Occasionally the commission may be a fixed amount negotiated between us and the insurer. In some cases where clients pay us fees in connection with the placement and servicing of their insurance business, commissions may be credited against any fee to be paid by the client; if so, this will be set forth in our written client agreement.
Contingent Commissions and Other Incentive Payments: Some of the insurers that Capacity represents grant us the opportunity to receive contingent commissions or supplemental income. Unlike regular commissions, contingent commissions and supplemental income are not tied to a specific policy, but rather are generally tied to various criteria relating to the overall business we place with those insurers, typically measured on an annual basis. These contingent commissions and supplemental income may be based on a number of factors relating to the business placed by our agency with the insurance company, including growth in premium, loss ratios, total written premium, premium volume, retention of business, profitability, and/or other criteria. Further, in connection with the placement of insurance, we may also receive compensation from intermediaries, such as wholesalers, other agencies and brokers, or re-insurers. In addition, some insurance companies may offer our agency other incentives or payments, such as marketing or administrative support, promotional fees, educational costs, and/or prizes, gifts, or awards (e.g. meals, trips, etc). In some cases, we may enter into relationships with an insurance company whereby we provide the insurer with additional services for which we receive a fee, such as premium finance contracts, policy or claims administration, or loss control services. In some cases, we may own stock in a particular insurance company or reinsurance company.
Interest Income : In some cases where our clients pay for insurance policies through the agency (instead of by direct payment to the insurer which issued the policy), the agency may receive income from interest accruing on amounts held for payment to insurers.
This synopsis provides an overview of our general compensation practices. Because it is only a general overview, there may be exceptions not addressed above. Capacity will disclose to our clients at their request the actual or anticipated compensation we receive in connection with the issuance or placement of insurance business and will upon request provide more information about our contingency fee and supplemental income arrangements with particular insurers.
CODE OF BUSINESS CONDUCT
Our Commitment of Trust and Integrity to Our Customers
The Capacity Group of Companies endeavors to meet the insurance needs of its Customers with the necessary insurance coverage, service and security at a fair price. We foster a spirit of trust with our Customers that rests on the twin pillars of honesty and integrity. The cornerstone of this relationship with our Customers is the disclosure and transparency of the compensation arrangements for services we provide to our Customers and insurers.
We will never place our own financial or other interests over those of our Customers. To bolster our commitment to our Customers and to the highest ethical standards of behavior, we require all our employees and licensed producers to observe the fundamentals of our business practices in avoiding even the appearance of any conflicts of interest that relate to the offering and placement of insurance products and services and which include:
It is imperative that the needs and interests of our Customers be placed ahead of all other interests. Before giving advise or making recommendations, a diligent effort must be made to learn our Customer’s needs, objectives, and circumstances, and then to offer products and services suitable to such needs.
Customers must be treated fairly and with respect and dignity and we must only make promises to our Customers that we believe we can legitimately fulfill.
We do represent the interest of the insured in an insurance transaction either by receiving compensation or providing disinterested advice to the prospective insured and we are required to do the following:
If we charge the insured a service fee in an insurance transaction, we are required to provide a written agreement between us and the Client which makes the following disclosures, sufficiently complete and understandable to enable the Client to understand and consider the potential incentives we will receive as producers in the proposed insurance transaction and the costs of the coverage: