Producer Compensation Disclosure Notice
Fair American Insurance and Reinsurance Company and Fair American Select Insurance Company (“FAIRCO”) sell its insurance products and services through insurance agents and brokers, commonly referred to as “Producers.” The compensation we pay our Producers is designed to encourage them to sell our products, place profitable business with us, and provide services to our policyholders. This Notice provides an overview of how FAIRCO may compensate its Producers for the sales and service of insurance products on its behalf.
FAIRCO generally pays its Producers a base commission for each insurance policy, including each renewal, sold and serviced on behalf of FAIRCO and its subsidiaries. The base commission is a fixed percentage of the policy premium, generally set prior to the sale of the policy to which it applies. This percentage may vary depending on certain factors such as the type of product, risk classification, producer size, state where the risk is located or services provided to the policyholder, and whether the policy is new or a renewal.
In addition to Base Commission, certain Producers may be eligible to receive a Contingent Commission. The amount of contingent commission that FAIRCO may pay is a particular percentage of policy premium written during a preceding performance period and may be based upon the Producer’s ability to meet certain pre-established performance goals.
Other Incentives, Benefits and Compensation
FAIRCO may pay certain Producers other payments, benefits and compensation which may also depend on the Producer’s satisfying pre-established goals. These other payments, benefits and compensation may include:
Marketing and Other Support
FAIRCO assists or pays certain Producers’ marketing efforts and other business expenses to help Producers promote FAIRCO and our products. Payments may include, but are not limited to, such items as continuing education, licensing, training expenses, training, lead generation services, advertising assistance, sales and business meetings or other services that help to promote us and our products. In addition, FAIRCO may compensate Producers for the additional services that the Producers may provide or obtain from others, including, but not limited to underwriting, claims, and administrative services, loss control, and premium audit.
FAIRCO may, from time to time, provide Producers complimentary items of nominal value and pay for meals, travel or other entertainment expenses.
This is a summary and overview of how FAIRCO may compensate its Producers. Because this is an overview, there are exceptions or details not addressed in this disclosure. For specific details about compensation or a commission paid on your policy, please contact your Producer.
This Notice is provided on behalf of Fair American Insurance and Reinsurance Company and Fair American Select Insurance Company.
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