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Petitioner’s compensation was based on a percentage of the
net premiums. The compensation varied by the type of insurance,
such as automobile and homeowner’s. Petitioner was also assigned
policies for which he received a smaller commission than those
policies he personally produced. State Farm assigned existing
policies to petitioner because the policyholders moved to the
geographic location covered by his agency. Similarly, when
policyholders covered by petitioner moved to a different
geographic location, the policies were assigned to another agent
in that geographic area. Petitioner did not compensate other
agents for policies he assumed, and he did not receive payments
for policies assigned to other agents.
The commissions payable for assigned policies are provided
for in the schedule of payments attached to the agreement in
relevant part as follows:
an amount equal to 66-2/3 percent of the graded
commission scale in Section I, provided, however, no
commission shall be payable to you on any premium
collections on business credited to your account from
the account of an agent whose agreement with * * *
[State Farm] has been terminated, or as a result of an
agreement between an agent and * * * [State Farm]
pursuant to the applicable paragraph of Section IV of *
* * [an agreement], until a one-year period has elapsed
following the date of such termination, except as
provided for in paragraph IV-B-2 of this Schedule of
Payments.
b. Termination
Section III of the agreement addresses termination. Either
party could terminate the agreement by written notice. The
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Last modified: May 25, 2011