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date, the relevant underwriter would transmit the renewal policy
to Kaiser. At that time, Kaiser would review the policy to
determine if it was the best policy for the particular insured.
If Kaiser determined that a change in coverage was warranted, it
would contact the insured and recommend the change. The insured
could either accept the recommended policy change or renew the
existing policy.
Kaiser had a separate contract with each underwriter it
represented. Each contract delineated the terms of the agency
relationship. The contracts provided that Kaiser would earn a
commission on each policy it issued. The commission generally
was a percentage of the premium due under the policy, and the
percentage varied depending on the type of insurance issued. The
agency contracts also provided that the "expirations" (i.e.,
renewal lists and all other information regarding insureds) held
by Kaiser generally remained Kaiser's property even after
termination of the agency relationship and that the underwriters
were not permitted to solicit business directly from, or discuss
policies with, prospective or existing insureds.
The insureds paid premiums either to Kaiser (i.e., indirect
premium payments) or directly to the underwriter (i.e., direct
premium payments). In the case of indirect premium payments,
Kaiser generally received a check from the insured payable to
Kaiser. Kaiser would deposit the check, retain its commission,
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Last modified: May 25, 2011