Insurance Subproducer Agreement Checklist
Review an insurance subproducer agreement with a practical checklist for authority, compensation, book ownership, records, service, compliance, termination, and portability.
An insurance subproducer agreement checklist should answer how business enters the agency, who is authorized to do each task, how compensation is calculated, what "owning the book" means, and what happens when the relationship ends.
Do not treat a template as a complete agreement. The contract must fit the states, licenses, employment or contractor relationship, markets, products, customers, service model, and data involved. Both parties should use qualified legal, tax, and insurance compliance advisers.
This checklist helps organize that review. It is not legal or tax advice.
1. Identify the parties and regulatory roles
Use the full legal names of the producer, any producer entity, and the agency. Record addresses, tax information, license identifiers, and the person responsible for compliance.
The NAIC State Licensing Handbook explains that business entities acting as producers may need licenses and a designated responsible producer. The agreement should not imply that contracting with an agency cures a missing individual or entity license.
Confirm:
- individual and business-entity licenses
- lines of authority and approved states
- appointments or affiliations where required
- surplus-lines or specialty authority when applicable
- errors and omissions requirements
- responsibility for renewals, fees, continuing education, and reporting actions
2. Define scope and authority
List the products, industries, geographies, customer types, and market paths included. State which activities the subproducer may perform and which require agency approval or licensed supervision.
| Activity | Contract question |
|---|---|
| Prospecting | Which audiences, channels, claims, and materials are approved? |
| Intake | Which facts and documents must be captured? |
| Advice | Who may discuss coverage, limits, exclusions, and alternatives? |
| Submission | Who selects and approaches carriers, MGAs, or wholesalers? |
| Binding | Who has authority to request or confirm bind? |
| Service | Who handles certificates, endorsements, billing, audits, and claims routing? |
| Renewal | Who contacts customers, updates exposures, and remarks the account? |
The NAIC producer licensing overview explains that selling, soliciting, and negotiating are licensed activities. Technology access or an internal title does not expand authority.
3. Define compensation with a formula
State the compensation base and the order of calculations. If a split applies to collected net commission, define "collected," "net," and every permitted deduction.
Address:
- new business and renewal rates
- fees and contingent income where permitted
- wholesaler, referral, co-producer, and service deductions
- payment timing and statements
- cancellations, return commission, and chargebacks
- premium-audit increases and decreases
- disputed calculations and correction deadlines
- compensation after termination
Avoid attaching an unlabeled percentage to the agreement. Use a worked example and state that the contract formula controls.
4. Define the book and account categories
"The subproducer owns the book" is not precise enough. Define the rights associated with originating, assigned, house, shared, cross-sold, rewritten, and transferred accounts.
Create an account schedule with customer code, origin, participating producer, policy, effective date, ownership category, and renewal-credit rule. State how additions and corrections are approved.
Describe ownership as specific rights
Address renewal compensation, record access, customer communication, solicitation after termination, portability, transfer, purchase rights, and restrictions. Note that customer choice and carrier, intermediary, privacy, licensing, and legal requirements still apply.
Address shared accounts
If one producer originates a customer and another adds a policy, define whether ownership and compensation apply at the customer, policy, revenue, or relationship level.
5. Allocate service and renewal work
The agreement should assign service responsibility and performance expectations. Include certificates, endorsements, policy changes, billing, audits, claims routing, document delivery, renewal preparation, remarketing, and customer escalations.
State service hours, communication channels, response targets, and escalation. If the producer receives renewal economics without routine service duties, identify which agency costs or split reflect that allocation.
For a broader operating model, read how to build an insurance book without starting an agency.
6. Govern records, data, and communications
Name the system of record. Require customer facts, submissions, quotes, policies, service work, and communications to be stored there. Define access, acceptable use, security, retention, export, and deletion.
The agreement should prohibit unapproved customer lists or policy records from being kept in personal email, spreadsheets, or devices. It should also describe what each party receives at termination and what must be returned or deleted.
Marketing and customer communications should use approved claims and channels. Identify who reviews messages that discuss coverage, pricing, availability, or carrier appetite.
7. Address compliance and risk ownership
List responsibility for licensing checks, appointments, training, disclosures, complaints, audits, record requests, premium handling, errors and omissions matters, and regulatory inquiries.
Define indemnity, limitation of liability, and insurance requirements with counsel. Do not use indemnity language as a substitute for operational controls.
The agreement should allow the agency to pause activity when a license, appointment, carrier path, compliance review, or customer-protection issue requires it.
8. Design termination before launch
State termination rights, notice periods, immediate suspension events, and the process for open work. Cover pending quotes, bound policies, customer service, upcoming renewals, unpaid compensation, records, and customer communications.
If book portability is possible, define conditions, timing, market restrictions, data transfer, customer consent or communication, and treatment of policies that cannot move. If portability is not promised, say so plainly.
Restrictive covenants vary by state and can change. Use current state-specific counsel for non-solicitation, noncompetition, confidentiality, and customer-contact terms.
9. Add reporting and review rights
Provide statements that let the subproducer understand policies, agency revenue, splits, adjustments, and payments. Define the period to question a statement and the records available for review.
Schedule periodic business reviews for pipeline, written premium, revenue, retention, service quality, licensing, market changes, and account-schedule accuracy. A contract is stronger when the operating evidence stays current.
Final review questions
Before signing, both parties should be able to answer:
- What may the subproducer do today, in which states and markets?
- Who owns every step from lead to renewal?
- How does one dollar of agency revenue become producer compensation?
- Which accounts are part of the book and what rights attach to them?
- Where is the complete customer record?
- What happens to open work and renewal economics after termination?
- Which promises remain subject to customer, carrier, regulator, or third-party approval?
Kinro's subproducer model is built around a written allocation of book rights, economics, responsibilities, and exit terms. To discuss the agreement architecture for your niche and current licenses, contact Kinro about building your book.