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Agent Selection, Compensation, Service <br /> The selection of an agent is determined by the city. <br /> Any licensed agent can be selected to work with the city on LMCIT coverages. If the city <br /> considers changing agents, LMCIT recommends the process begin well in advance of the city's <br /> coverage renewal date. This will ensure that the new agent selection is resolved before work <br /> begins on the renewal and that the new agent is in place to handle the renewal work. <br /> The agent's fee is negotiable between the city and the agent. <br /> LMCIT's practice is to include an allowance for a 10 percent agent's fee in the premium for <br /> property/casualty coverage. LMCIT then pays that fee to the agent. However, the city and the <br /> agent are free to agree on a higher or lower percentage fee,or on a different basis for compensating <br /> the agent. <br /> If the city and agent agree on a different percentage fee, the city should notify their LMCIT <br /> underwriter. The premium quote will then reflect that change. Any increase or decrease in the <br /> agent's compensation will flow through directly as a dollar-for-dollar increase or decrease in the <br /> city's premium. <br /> Another possibility is for the city and agent to agree on a different compensation basis instead of <br /> the percent-of-premium approach. A flat annual or monthly retainer fee or hourly rate for services <br /> performed are some of the possibilities. When the city and agent move to this sort of arrangement, <br /> it generally works best for the city to compensate the agent directly. In that case, LMCIT would <br /> provide the property/casualty coverage quote on a "net of commission" basis. <br /> LMCIT workers' compensation rates include an allowance for a 2 percent agent's fee. If the city <br /> chooses not to use an agent for workers' compensation, or if the agent's services on workers' <br /> compensation are included and compensated under a direct contract for service, the 2 percent agent <br /> fee allowance is refunded to the city. <br /> The services an agent provides is negotiable between the city and the agent. <br /> From an LMCIT standpoint, the agent's role is more of as an adviser and service provider to the <br /> city, rather than as a salesperson for LMCIT. The <br /> attached model resolution includes a suggested list of <br /> services which an agent would typically provide. This list Your League Resource <br /> of services was developed in cooperation with MIIA. For additional information and <br /> However, the city and agent are free to negotiate their materials such as sample city-agent <br /> own arrangement with either a broader or narrower range service contracts and RFPs,contact <br /> of functions to be performed by the agent. What services Laura Honeck at 651-281-1280 or <br /> the city needs and wants will vary from city to city. The lhoneck@lmc.org <br /> important thing is that the city and the agent discuss and <br /> agree on what the expectations are. <br /> Laura Honeck 1/11 <br /> 2 <br />