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required by the State of Washington.2 He continued to sign all
of the Edwards agency’s payroll checks, examined the books and
records of the business regularly, and paid bills for business
items such as paper and stamps. Mr. Edwards also retained the
power to fire Ms. Payne, and he reviewed the “folios”, which
reported the Edwards agency’s commission income from premium
renewals. At no time was petitioner Joan E. Edwards (Mrs.
Edwards) involved in the business operation of the Edwards
agency, nor did she hold an insurance license.
In 2003, the Edwards agency maintained three full-time
employees and had gross receipts of $181,700. Petitioners
received $62,483 in net income from the Edwards agency. Premium
renewals from clients accounted for 85 percent of the net income
of the Edwards agency,3 and the additional 15 percent came from
clients purchasing additional insurance on new cars, homes, or
other property. The Edwards agency did not solicit premium
renewals. Instead, the regional or national Farmers Insurance
office sent Edwards agency clients renewal notices in the mail,
and the clients made their payments directly to the Farmers
2 In order to own an insurance agency in Washington, a
person must have an insurance license. Wash. Rev. Code Ann. sec.
48.17.060 (West Supp. 2008).
3 During 2003, Farmers Insurance made 12 monthly deposits
of such premium renewals into the NW Farmers Insurance Group
Federal Credit Union account of petitioners, and those deposits
totaled $154,179.
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Last modified: March 27, 2008