Suret(ies) sell insurance products and services through insurance agents and brokers, commonly referred to as "Producers." The compensation paid to producers is designed to encourage them to sell products, place profitable business with the surety(ies), and provide services to policyholders. A producer may receive one or more of the below payments, depending on the Producer's business relationship with its surety(ies).
Producers are generally paid a Base Commission for the sale and service of policies. Base Commission is a fixed percentage of the policy premium or a fixed amount per policy set prior to the sale (effective date) of the policy to which it applies. The percentage or amount may vary depending on certain factors, such as the type of product, the risk classification, whether the policy is new or a renewal, whether another policy is written for the same insured, and the services provided to the policyholder. In some cases, the percentage or amount may be negotiated on a transaction by transaction basis, and may vary by Producer based, at least in part, on the Producer's past performance and the expected value of the Producer's business going forward. Surety One, Inc. is paid a base commission for soliciting, negotiating, underwriting, quoting, issuing and/or delivering surety bonds and insurance products.
Like Base Commission, Supplemental Commission is a fixed percent of premium or a fixed amount per policy, which is set prior to the sale of the policy to which it applies. Eligibility for, and the amount of, Supplemental Commission paid on current business is based upon a Producer's ability to meet certain past production, growth, profitability or other historical performance objectives established by the surety(ies).
Without exception, all of our client's and their end users are engaged in commercial enterprises that require business acumen and insurance producers that are likewise knowledgeable about risk management. We assume our consumers to be "sophisticated commercial insurance purchasers."
Contingent Commission is generally a particular percent of the premium written during a preceding performance period or a particular sum that is based upon a Producer's ability to meet certain production, growth, profitability or other performance objectives established by us for that preceding period. As such, eligibility for, and the amount of Contingent Commission cannot be determined until after the sale of bonds that occur over a given period of time. Contingent Commission is generally paid separately from Base Commission on an annual or other periodic basis. By executing this document you specifically acknowledge your understanding that we may enter into such contingency arrangements.
Some producers may charge their customers a fee on their own account related to services they provide to their customers. Any such fee would not be part of the premium charged by the surety, would not be charged on the surety's behalf, and may be in addition to receiving compensation from us. We charge market policy fees, fees as a contingency for successful quoting of hard to place bond and insurance risks, and fees for conducting due diligence/investigation of a principal, its creditworthiness, reputation, conduct, peer comparisons and the expenses associated with the same. Every client of Surety One, Inc. receives a copy of a fee agreement and is required to sign the same. Endorsments and change riders may or may not be "premium bearing". We charge a minimu flat fee of $75 for non-premium bearing riders. This fee is NOT a premium and is not regulated under filed rate rules. The charge is remuneration for the incredible pain in the ass that execution, reporting and archiving of change riders represents. Request of a rider or endorsement incurs this fee in addition to any excess premium that might be due in the care of a premium-bearing rider, to which each principal or insured acknowledges and accepts.
Unless specifically waived, we charge a fee of seventy five dollar minimum for change riders including reinstatements of canceled bonds, which is in addition to any premium that may be due for a bond penalty increase. Accomplishing a rider that complies with obligee requirements entails file review, manuscripting, seals, powers of attorney and notarization where statutes or obligee protocol demand them, as well as the time and effort of reporting and updating the surety liable for you bond. When requesting a rider, you consent to this fee for which you are informed when one of our underwriters confirms your desire to purchase a bond from us. Riders are a service, not "negotiating or selling" insurance by statutory meaning.
Certain applicants may or may not qualify for standard (filed) rates or we may choose to place certain applicants on non-standard surety programs. Applicants/bond principals should clearly understand such deviation from standard or filed rates and by entering into an bond agreement with Surety One, Inc., and/or it's producers, specifically consent to the same. Certain risks may require broker placement fees in addition to premium. Such contingency placement fees are compensation for a produer/broker's efforts to place an applicant's risk. Applicant acknowledges these cost issues and specifically consents to the same by entering into contract with Surety One, Inc.
New Jersey Addendum
You may feel free to contact us with any questions regarding this policy at (800) 373-2804.