RFR 2026 DOI 006 MEMO OF UNDERSTANDING AGENT CONTRACT.doc

MEMORANDUM OF UNDERSTANDING

Reference of Fire and Casualty Insurance Agent Contract Cancellation, Modification, or Expiration in Accordance with M.G.L. c. 175, § 163

This Memorandum of Understanding (“Memorandum”) is entered into by and among the Massachusetts Division of Insurance (“Division”), [Name of Insurance Agent/Insurance Agency], [Name of Insurance Company] and [Name of Third Referee Appointed by Division] (collectively the “Parties”) for the purposes of determining whether the cancellation, modification or expiration of [Name of Insurance Agent/Insurance Agency]’s contract with [Name of Insurance Company] will so affect the renewal, continuation of replacement of any policies placed with [Name of Insurance Company] through the efforts of [Name of Insurance Agent/Insurance Agency], or whether the services needed by any policyholder doing business with [Name of the Insurance Company] as a result of the efforts of [Name of the Insurance Agent/Insurance Agency], justify the renewal or continuation of any policies then in effect having been placed with [Name of Insurance Company] by [Name of Insurance Agent/Insurance Agency] pursuant to M.G.L. c. 175, § 163.

The Parties additionally agree as follows:

1. [Name of Insurance Company] notified [Name of Insurance Agent/Insurance Agency] on [date of notice] of its intent to cancel or modify its contract with [Name of Insurance Agent/Insurance Agency] in accordance with M.G.L. c. 175, § 163.

2. [Name of Insurance Agent/Insurance Agency] made written demand for reference to [Name of Insurance Company] regarding [Name of Insurance Company]’s notice of proposed cancellation or modification of its contract with [Name of Insurance Agent/Insurance Agency] in accordance with M.G.L. c. 175, § 163.

3. The referee selected by [Name of Insurance Agent/Insurance Agency] in accordance with M.G.L. c. 175, § 163 is [Name and Address of referee selected by Insurance Agent/Agency]. This referee is a disinterested person, a resident of the Commonwealth and willing to act in this capacity.

4. The referee selected by [Name of Insurance Company] in accordance with M.G.L. c. 175, § 163 is [Name and Address of referee selected by Insurance Company]. This referee is a disinterested person, a resident of the Commonwealth and willing to act in this capacity.

5. The Commissioner of Insurance (“Commissioner”) has appointed [Name of Third Referee] to serve as the third referee and the chairperson of this reference proceeding in accordance with M.G.L. c. 175, § 163. This chairperson is a disinterested person, a resident of the Commonwealth and willing to act in this capacity.

6. Within ten (10) days of the Commissioner’s appointment of the chairperson, the three referees shall meet, hear evidence and issue a signed, written decision regarding their findings and conclusion. A copy of this decision shall be delivered to the Parties and to the Commissioner. This decision shall be binding on [Name of Insurance Agent/Insurance Agency] and [Name of Insurance Company].

7. [Name of Third Referee] will examine any agreement for reference that may have been made by the [Name of Insurance Agent/Insurance Agency] and the [Name of Insurance Company] to see that the terms of such agreement are fulfilled. The referees are not required to sign any agreement that would be detrimental to either party relating to their respective interests.

8. If the referees find that the cancellation, modification or expiration will so affect the renewal, continuation or replacement of any policies placed with [Name of Insurance Company] through the efforts of [Name of Insurance Agent/Agency], or the services needed by any policyholders doing business with [Name of Insurance Company] as a result of the efforts of [Name of Insurance Agent/Insurance Agency], then the referees shall issue a decision ordering continuance or renewal of any policies expiring within a period of 13 months of the [Name of Insurance Company]’s issuance of notice to [Name of Insurance Agency/Insurance Agency] of its intent to non-renew, cancel or modify the agent’s contract with the company. The referees shall order such policies be renewed for one additional policy period equal in length to the most recent policy period, but in no event shall be renewed for a policy period in excess of one year. The referees further shall order that the rate of compensation for the continuance or renewal of such policies shall be equal to that provided in the contract between [Name of Insurance Agent/Insurance Agency] and [Name of Insurance Company], as is expiring, being cancelled or modified by the insurance company.

9. The referees shall not order the continuance or renewal of any policies expiring within the 13 month period set forth in paragraph 7 above if they find that the reason for the cancellation or expiration of the contract between [Name of Insurance Company] and [Name of Insurance Agent/Insurance Agency] was legitimately based on one of the following grounds:

a. [Name of Insurance Agent/Insurance Agency] has been convicted of a dishonest act related to his occupation as an insurance agent;

b. [Name of Insurance Agent/Insurance Agency]’s license to engage as an insurance producer was revoked; or

c. [Name of Insurance Company] surrendered its license to do business in the Commonwealth.

10. The referees’ decision may order continuance or renewal of any or all policies expiring within the 13 month period set forth in paragraph 7 above. The referees may order such policies be renewed for one additional policy period equal in length to the most recent policy period, but in no event shall be renewed for a policy period in excess of one year. The referees further may order that the rate of compensation for the continuance or renewal of such policies shall be equal to that provided in the contract between [Name of Insurance Agent/Insurance Agency] and [Name of Insurance Company], as is expiring, being cancelled or modified by the insurance company.

11. The referees’ decision may provide for the continuance of previous contract provisions, if the referees, or a majority of the referees, find that such decision will best protect the right of a policyholder to a continuance of insurance and the services of an agent of his own choosing and the right of any agent to compensation for the insurance placed with a company as a result of his efforts given due consideration to the possibility the affected agent has of obtaining similar coverage for policyholders affected from other companies at reasonable compensation.

12. If the referees’ decision orders the renewal or continuance of any policies, such policyholders and [Name of Insurance Agent/Insurance Agency] shall be entitled in all respects to the same services and practices as were in effect prior to the reference insofar as amounts and types of coverage, credit terms and agency services are also continued.

13. If the referee’s decision orders the renewal or continuance of any policies, the referees, or a majority of the referees, shall fix a fair compensation for [Name of Insurance Agent/Insurance Agency] in the decision.

14. Upon execution of the decision, [Name of Third Referee] shall furnish [Name of Insurance Agent/Insurance Agency] and [Name of Insurance Company] with a written statement specifying in detail his or her charges for compensation and expenses. Such statement shall be in accordance with the hourly rates for [Name of Third Referee] currently on file with the Division, specifically [list applicable hourly fees and expenses].

15. [Name of Insurance Agent/Insurance Agency] and [Name of Insurance Company] shall each be liable for the payment of the reasonable charges and expenses of their respective referees. [Name of Insurance Agent/Insurance Agency] and [Name of Insurance Company] also shall be liable for one half of the compensation and reasonable charges and expenses of [Name of Third Referee].

16. Time and mileage for travel for [Name of Third Referee] will compensated based on the time that the he/she leaves his/her home, but in no case shall it exceed the time and mileage it would take to travel from the current offices of the Division.

17. [Name of Third Referee] shall submit to the Division within five (5) days after the date of the final decision a detailed statement of traveling time, the number of meetings held, the actual time of arriving at and leaving said meetings, and such other data as have reference to the decision of the referees. [Name of Third Referee] also shall report to the Division the amount of his/her bill for services and expenses and whether the award was rendered by a majority of the referees or all three referees.

18. [Name of Insurance Agent/Insurance Agency] and [Name of Insurance Company], if aggrieved by the charges of [Name of Third Referee], may petition the Commissioner for review of such charges. This petition shall set forth with particularity the specific item or charges in dispute. The Division will hold a hearing on the petition in accordance with M.G.L. c. 175, § 163, after which the Commissioner shall approve or disapprove the disputed charges in whole or in part. The Commissioner’s findings and decisions relative to the petition and disputed charges shall be final and conclusive.

19.

This Memorandum of Understanding shall be in effect until the resolution of this reference proceeding.

This Memorandum of Understanding may be executed in counterparts and is entered into by:

For the Division of Insurance:

Name

Title

Massachusetts Division of Insurance

1000 Washington Street, Suite 810 Boston, MA 02118 For [Name of Insurance Agent/Insurance Agency]:

Name

Title

Address

City, State ZIP

For [Name of Insurance Company]

Name

Title

Name of Insurance Company

Address

City, State ZIP

For [Name of Third Referee]

Name

Address

City, State ZIP