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HNA Producer Agreement

HNA Producer Agreement

 

This HNA Producer Agreement (this “Agreement) is between Producer and Health Networks of America, LLC, a Nevada limited liability company, on behalf of itself and its affiliates (collectively, “Company”). For purposes of this Agreement, HNA’s affiliates shall, at HNA’s election, include any entity in which HNA holds equity ownership or has a written partnership agreement with or any other form of partnership implied or otherwise.

 

A.  Duties and Authority of Producer

 

  1. Producer shall solicit from groups and members of the general public, applications for the products included in Addendum A (“Company Products”), which is hereby made a part of this Agreement. Producer is only authorized to solicit business for, and this Agreement only applies to, the product included in Addendum
    1. Producer’s authority under this Agreement is non-exclusive.

 

  1. Producer will service Company customers and insureds issued Company Products as a result of applications submitted by Producer (hereinafter, referred to as “Insured” or “Insureds”).

 

  1. Producer agrees to secure and maintain such licenses and appointments by Company as is necessary to transact business on behalf of Company and as required by any state or jurisdiction where Producer solicits sales of any Company Products. Producer shall provide Company copies of all required licenses. Producer further agrees to notify Company immediately of any expiration, termination, suspension or other action by a Department of Insurance or any other governmental agency affecting said license or appointment. Producer further agrees to notify Company in writing immediately upon receiving notice of any misdemeanor or felony charges or any actions including, but not limited to, convictions by any governmental authority for commission of any act involving fraud, dishonesty, breach of trust, theft, and misappropriation of money or breach of any fiduciary duty.

 

  1. Producer agrees to comply with the rules of Company relating to the completion and submission of applications, assist in the installation of Company Products, and to make no representation with respect to the benefits of any benefit contract or policy offered by Company not in conformity with the material prepared and furnished to Producer for that purpose by Company. Producer shall use best efforts to ensure that each application for coverage is fully and truthfully completed by the applicant and the completed application fully and accurately reflects and discloses the circumstances, including the health condition, of persons for whom coverage is sought in the application. Producer further agrees, and agrees to inform every applicant, that Company will rely upon said health representations in the underwriting process, and that the subsequent discovery of material facts known to applicant and either not disclosed or misrepresented may result in the rescission of any benefit contract or policy entered into by Company. Producer will also inform the applicant that in no event will the applicant have any coverage unless and until the application is reviewed and approved by the Company and a benefit contract or policy is issued.

 

  1. Producer is not authorized to, and agrees not to, enter into, alter, deliver or terminate any benefit contract or policy on behalf of Company, extend the time of payment of any charges or premiums, or bind Company in any way. Producer acknowledges and agrees that Company reserves the right, in accordance with applicable law, to reject any and all applications submitted by Producer.

 

  1. Producer is not authorized to receive any Company funds except the initial premiums for Company Products if expressly permitted by Company in writing, and Producer is not authorized to deduct compensation, service fees or allowances from any initial premiums Producer may be permitted to collect. Any funds that Producer does receive for or on behalf of Company shall be received and held by Producer in a fiduciary capacity, shall be separately accounted for, shall not be commingled by Producer with personal funds of Producer or other business accounts managed or owned by Producer, shall be deposited to a trust account in a state or federal bank authorized to do business in the appropriate state and insured by an appropriate federal insuring agency, and shall be remitted to Company promptly but in no event later than five (5)calendar days from the date of receipt. Nothing in this Agreement shall preclude Producer from collecting any fees from Insureds other than those amounts that are due and owing to Company by Insureds. Such fees can include an application fee so long as the Producer provides value-added services to the Insured during the Insured’s application process that are in addition to the services that a producer typically provides during the application process. 

     

    1. Producer shall not broadcast, publish or distribute any advertisements or other material relating to Company Products, not originated by Company, nor use the name, trademark or logo of Company in any way or manner without Company’s prior written consent and then only as specifically authorized in writing by Company. The restrictions on promotional and descriptive material included in this Paragraph 7 includes, but is not limited to, enrollment materials, internet communications or any other electronic transmissions representing Company Products, brochures, telephone directory advertisements (print or electronic) and Producer or agency company listings.

     

    1. Producer agrees to maintain complete and separate records for Company for a period of at least ten (10) years of all transactions pertaining to applications submitted to and accepted by Company, and any other documents as may be required by the applicable Department of Insurance or other governmental agency. Any and all records described above or as may otherwise relate to Producer’s activities in connection with Company business shall be accessible and available within five (5) days of request to representatives of Company, and to federal, state and local governmental authorities having jurisdiction over Company, or their respective designees, each of whom may audit such records at any time upon reasonable prior notice while this Agreement is in effect or within ten (10) years after termination thereof.

     

    1. Producer agrees to obtain and maintain Errors and Omissions Insurance coverage with minimum amounts of $1,000,000 per incident and $1,000,000 in aggregate, or such higher amounts as may be required by law or as determined by Company, and from a carrier satisfactory to Company. Producer shall provide to Company, upon request, certificates of insurance evidencing such coverage. Producer agrees to make best efforts to, provide Com in any event will provide notice as soon as reasonably practicable, of any modification, termination or cancellation of such coverage.

     

    1. Producer is an independent contractor and shall have no claim to commissions except as may be provided in this Agreement and Producer shall not be entitled to reimbursement from Company for any expenses incurred in performing any of its obligations under this Agreement. Producer further agrees that to the extent of any indebtedness to Company from Producer, Company shall have a first lien against any compensation which may be due Producer by Company, and such indebtedness may be deducted at the Company’s option from any compensation which may be due Producer by Company regardless of how such indebtedness was created. Moreover, this Agreement does not give Producer any power of authority other than as expressly granted herein and no other or greater power shall be implied from the grant or denial of powers specifically mentioned herein.

     

    1. Producer will treat as trade secrets any and all information concerning customers of Company or its business, products, techniques, methods, systems, price-books, rating tools, plans or policies; and Producer will not, during the term of this Agreement or at any time thereafter, disclose such information, in whole or in part, to any person, firm or corporation for any reason or purpose whatsoever, or use such information in any way or in any capacity other than as a sales agent/producer of Company in furtherance of Company’s interests. With respect to information concerning customers of Company, Producer will implement a comprehensive written information security program that includes administrative, technical and physical safeguards for the protection of such information that are appropriate to Producer’s size, complexity, nature and scope of activities and that is designed to:

     

    1. Ensure the integrity and confidentiality of such information;
    2. Protect against any anticipated threats or hazards to the security or integrity of such information; and
    3. Protect against unauthorized access to, or use of, such information that could result in substantial harm or inconvenience to any customer of Company.

     

     

    In addition, Producer acknowledges and agrees that Company may impose required privacy and security measures from time to time, including but not limited to, encryption of electronic devices that are used by Producer in fulfilling its obligations under this Agreement, and that it shall promptly implement such security measures following Company’s disclosure of the same. Failure to promptly implement such security measures shall be considered a material breach under Paragraph 3 of Section C of this Agreement. Upon termination of this Agreement, or sooner if requested by Company, Producer will immediately deliver to Company any and all literature, documents, data, information, order forms, memoranda, correspondence, customer and prospective customer lists (obtained from Company), customer orders, records, cards or notes acquired, compiled or coming into Producer’s knowledge, possession, custody or control in connection with his/her activities as a sales agent/ producer or sales representative of Company, as well as all machines, parts, equipment, rating tools and other materials received by Producer from Company or from any of its customers, agents/producers or suppliers in connection with such activities.

     

    1. With respect to information concerning customers of Company, Producer agrees to:

     

    1. Ensure that any agent, including a subcontractor, to whom it provides any such information received from, or created or received by Producer, agrees to the same restrictions and conditions that apply through this Agreement to Producer with respect to such information; and
    2. In no event, without Company’s prior written approval, provide such information to any employee or agent, including a subcontractor, if such employee, agent or subcontractor receives, processes, or otherwise has access to such information outside of the United States.

     

    1. Producer shall indemnify, defend and hold Company harmless from and against any loss, damage or expense, including reasonable attorneys’ fees, caused by or arising from the negligence, misconduct or breach of this Agreement by Producer or any of its permitted agents or subcontractors, or from the failure of Producer or any of its permitted agents or subcontractors to comply with any federal or state laws, rules or regulations.

     

    1. Company reserves the right, in its sole discretion, without any liability or obligation to Producer, to operate Company’s business, including making any changes to its business operations, as it chooses, including taking any of the following actions:

     

    1. To discontinue and withdraw from distribution any Company Product in any state;
    2. To modify or amend any benefit contract or policy;
    3. To establish, modify or change the premium rate charged by Company for any Company Product
    4. To determine all terms, conditions, and limitations, including the effective date, of any benefit contract or policy
    5. To modify or change the terms and conditions pursuant to which any Company Product is authorized to be sold;
    6. To cease doing business in any state or jurisdiction;
    7. To reject any application for coverage submitted by Producer;
    8. To modify or discontinue, or change the form or methodology of, any payments of commissions (as such term is defined in Paragraph 1 of Section B) to Producer (to the extent any such payments were previously made) upon prior notice as set forth Paragraph 8 of Section F, including all commission payments due and owing to Producer by Company for all new business produced by Producer as of the effective date of such modification or change and all business in force as of the effective date of such modification or change.
      1. To establish, modify or change any Company processes that differentiate between Producer and other producers of Company, including processes that may include or exclude conditions on the issuance of quotes.
      2. Producer shall cooperate fully with Company in effectuating the terms of this Agreement, in its business operations with Insureds and its potential customers, and in any investigation or proceeding of any regulatory or governmental body, or court of competent jurisdiction, including, where required by law, making its books and records available to such entities for inspection, if it is determined by Company that the investigation or proceeding affects matters covered by, related to, or arising out of this Agreement.
      3. Producer agrees to reasonably assist Company, at no cost to the Company, to ensure Company's compliance with all applicable laws, rules or regulations that relate to the Company Product(s) sold to the Insured. Such assistance shall include, but not be limited to, (a) providing notice to Company regarding Producer’s receipt of a request by Company’s member, an Insured, or prospective Insured for a Summary of Benefits and Coverage (as defined by federal law) (“SBC”); and/or (b) providing timely delivery of the SBCs to Company’s members, Insureds, and prospective Insureds, in each case as Company may request pursuant to the terms of its written policies that are communicated to Producer and that may be amended from time to time. Upon request by Company, Producer shall promptly provide Company with all relevant information and/or documentation regarding Producer’s fulfillment of its obligations set forth in this Section. Furthermore, Producer agrees to indemnify Company from and against any loss, damage or expense, including reasonable attorneys’ fees, caused by or arising from Producer's failure to provide such reasonable assistance.

     

    1. Producer agrees to comply, and will cause its principal persons and employees to comply, with any and all applicable state laws and regulations, including any and all applicable anti-corruption and anti-money laundering laws, other applicable rules, regulations and including, without limitation, those of the U.S. Office of Foreign Assets Control and the Securities and Exchange Commission, as well as the Foreign Corrupt Practices Act 1977 (as amended) with respect to all matters arising out of and in connection with this Agreement. With respect to anti- corruption laws, no money or other inducement will be offered, promised or paid in connection with this Agreement for the purpose of influencing an official act or decision, to exert influence or otherwise secure an improper advantage, or to obtain or retain business, and all transactions related to this Agreement will be fully, accurately and transparently recorded. In addition, Producer agrees that it does not and will not discriminate on the basis of basis of race, color, national origin, disability, age, sex, gender       identity, sexual orientation, or health status in its performance under this Agreement.

     

    B.  Commissions

     

    THIS SECTION SHALL ONLY APPLY TO THE EXTENT PRODUCER RECEIVES COMMISSIONS FROM COMPANY PURSUANT TO THE APPLICABLE COMMISSION SCHEDULE

     

    1. For purposes of this Agreement, the term “commissions” shall be defined broadly to include any compensation paid by Company out of Company funds to Producer on Company’s behalf in exchange for the services provided by Producer and described in this Agreement and may include payments based on (i) the amount of premium collected by Company from an Insured or (ii) the number of employees eligible for benefits employed by Insured, in each case, which are included in the premiums charged by Company to Insured, but shall specifically exclude (a) any bonus payments; and (b) any payments made by an Insured to Producer for which Company acts as a billing and collection agent or in a similar capacity, including payments that Producer has negotiated directly with Insured and are collected outside of Company’s premium. Company will pay Producer commissions on the benefit contracts or policies produced by Producer and issued by Company, if such commissions are required to be paid, in accordance with the terms set forth in the applicable commission schedule, which is hereby made a part of this Agreement. Any or all commission required to be paid by Company under this Agreement may, in the sole discretion of the Company, be paid to Producer by electronic means. Commissions will only be paid on such business for the time period which Producer has been designated “Agent of Record” or “Broker of Record” in writing by the Insured. Any change in “Agent of Record” or “Broker of Record” designation by an Insured must be in writing on the plan sponsor’s letterhead and signed by an authorized company officer or other Insured personnel acceptable to Company. An “Agent of Record” or “Broker of Record” letter that designates a change for commission payments (including a change in the recipient of such payments) will become effective on the first of the month following receipt by the Company unless another future date is designated in the letter, and the Producer agrees that such change may apply retroactively. If commission payments are adjusted retroactively and Producer is no longer the "Agent of Record" or "Broker of Record" as of an earlier date, Producer agrees that Company can set- off against future commissions, and/or can require Producer to remit to the Company any excess commission payments made by the Company within ten (10) days of the effective date except to the extent Producer can document, to the reasonable satisfaction of Company, that Producer continued to service such customer during the period between such earlier date and the retroactive date. Company shall not seek to offset or have the Producer remit any overpayments to Company beyond two years from the date of the event(s) giving rise to such recovery or offset efforts by Company. Notwithstanding the foregoing, the Company shall be entitled to seek to offset or have the Producer remit beyond such two year period if the Company initiates such actions within such two year period. Producer shall not seek to recover any underpayments or non-payments by Company to Producer beyond two years from the date of the event(s) giving rise to such recovery efforts by Producer.

     

    1. Renewal Commissions. Subject to Paragraph 5 of Section B, renewal commissions shall be payable to Producer by Company, subject to the terms of this Agreement, including the applicable commission schedule, as long as no other producer is designated in writing as “Agent of Record” or “Broker of Record” by the Insured with respect to the benefit contract for which renewal commissions are paid.

     

    1. Commission Assignment Rights.
      1. Producer may, with Company’s prior written consent, assign commissions payable with respect to individual medical policies and/or group benefit contracts produced by Producer and issued by Company under this Agreement, subject to the following conditions:
        1. The assignment must be in writing, in a form acceptable to Company and irrevocable, and will be honored only when the assignee certifies that (a) the assignor is a true employee of the assignee (or that the assignor is a partner of the assignee if the assignee is a partnership),

    (b) the assignor is required to assign all commissions to the assignee as a condition of employment and (c) because of such relationship, it is appropriate for Company to report such commissions for tax purposes as income to the assignee.

    1. The terms of the assignment must be determined by Company not to prejudice the interest of

    Company;

    • This Agreement is in force and in good standing at the time of assignment; and
    1. The Company determines in its sole discretion that such assignment of commissions is lawful.
    1. Any purported assignment or transfer of any interest in Producer’s commissions other than in   strict compliance with this Paragraph 3 shall be void as to Company.
    2. Any assignment or transfer of any interest in Producer's commission in compliance with this Paragraph 3 will not relieve Producer of its obligation to refund any impermissible commission payments, including, without limitation, payments made to Producer prior to Company's receipt of an "Agent of Record" or "Broker of Record" letter that designates a retroactive change in an Insured's producer.

     

    1. Rights to Commissions on Termination. If this Agreement terminates (other than under Paragraph 3 of Section C), the Company shall continue to pay commissions to Producer at the applicable renewal rates used by Company to pay renewal commissions to Producer on benefit contracts and policies produced by Producer at the time of termination for as long as Producer continues to be designated as “Agent of Record” or “Broker of Record” by the Insured with respect to the benefit contract for which renewal commissions are paid. Notwithstanding anything said above, should an individual Producer be hired by Company as an employee at any point after this Agreement becomes effective, such individual Producer shall not be entitled to any commissions for any renewal or on- going benefits contracts whether or not customer wishes Producer to remain as “Broker of Record”. Payment of commissions shall cease as of the date of hire by the Company. Please also reference Term and Termination.

     

    1. Loss of Renewal Commissions.

     

    1. No further commissions shall be payable to Producer should Company terminate this Agreement pursuant to Paragraph 3 of Section C
    2. If Producer is receiving commissions pursuant to post termination rights under Paragraph 4 of Section B, no further commissions shall be payable to Producer if:
      1. Producer fails to immediately remit to Company any funds received on behalf of the Company;
      2. Notwithstanding Company’s right of setoff, Producer shall at any time be indebted to Company for more than sixty (60) days;
    • Producer induces or attempts to induce any Insured to give up coverage or replace a benefit contract or policy with coverage by another company unless such change is clearly in the best interest of the Insured;
    1. Producer purports to act, or represents that Producer is entitled to act in any way on behalf of Company other than as expressly permitted by this Agreement; or
    2. Producer commits any act of fraud or dishonesty, engages in inappropriate behavior or conduct, breaches any fiduciary duty or does anything which would have been a material default or substantive breach during the period this Agreement remained in effect.

     

    1. Limitations on Commission Payments. Subject to the terms of this paragraph and the applicable addendum, Company will pay to Producer commissions due under this Agreement within thirty (30) days following the end of each calendar month based on premiums actually received and recorded by Company, if such commission is required to be paid. However, Company reserves the right to accumulate commissions until commissions due Producer equal at least $100.00. In addition, if Company does not receive a required percentage of the Insured’s billed premium within thirty (30) days of such billed premiums due date, the Company may withhold payment of any and all commissions that are otherwise due to Producer that are associated with such billed premium. The Company shall disclose any such required percentage in writing to Producer prior to implementing any premium collection requirement. If a return premium charge is due on Producer-generated business, Company has the right to charge back to Producer, or set-off against future commissions due Producer, the amount of commission previously paid to Producer on the amount of returned premium charge in situations in which commission payments by Company to a Producer are based on premiums paid by an Insured to Company. If employee eligibility for an Insured is retroactively adjusted, Company has the right to charge back to Producer, or set-off against future commissions due Producer, the amount of commission previously paid to Producer based on the number of eligible employees in situations in which commission payments by Company to a Producer are based on eligible employees of an Insured.

     

    1. Disclosure of Compensation. Producer agrees to disclose in writing to each customer in advance of purchase the nature of any compensation Producer will receive or may be eligible to receive from Company in connection with the placement or servicing of the customer’s business, as well as the nature of any other material business relationship that Producer has with Company. Producer will provide any additional disclosure required under state or federal law, including if applicable any disclosure that may be required pursuant to the Federal Department of Labor’s ERISA Prohibited Transaction Exemption 77-9. Company may disclose to customers compensation paid to Producer by Company or for which Producer may be eligible in accordance with Company’s policies on producer

     

    C.  Term and Termination

     

    1. This Agreement shall be effective for an initial term of one (1) year from the Effective Date, and thereafter shall automatically renew for additional terms of one (1) year each, unless and until terminated in accordance with the provisions of this Agreement.

     

    1. This Agreement may be terminated without cause at any time by Producer or Company by either party giving thirty (30) Days prior written notice thereof to the other party.
    2. Company may terminate this Agreement immediately upon written notice to Producer at any time upon:

    a). Material default or substantive breach by Producer of one or more of its obligations under this Agreement (including any amendments)

    b).any expiration, termination, or suspension of any license and appointment that is necessary for Producer to transact business on behalf of Company and that are required by any state or jurisdiction where Producer solicits sales of any Company Products, or Producer’s commission of fraud, dishonesty, breach of trust, theft, misappropriation of money, or breach of any fiduciary duty.

    c).Producer’s failure to comply with any provision of this Agreement shall be material if Company determines that such failure affects Producer’s ability to perform under this Agreement. Termination for cause shall not be Company’s exclusive remedy, but shall be cumulative with all other remedies available at law or in equity. A failure to terminate this Agreement for cause shall not be a waiver of the right to do so with respect to any past, current or future default.

     

    1. This Agreement will automatically terminate:
    1. upon the death of Producer, if Producer is an individual,
    2. upon the dissolution of the corporation or partnership, if Producer is a corporation or partnership, or
    • upon the Company’s employment of Producer as an employee, if the Producer is an individual. In the case of (iii), such individual Producer shall also not be entitled to any further payments as a Producer; to the extent such Producer was so entitled prior to such employment. Please reference “Rights to Commissions on Termination”, if applicable.

     

    D.  Settlement of Disputes

     

    1. Any controversy or claim arising out of or relating to this Agreement or the breach, termination or validity thereof, except for temporary, preliminary or permanent injunctive relief or any other form of equitable relief, shall be settled by binding arbitration.

     

     

     

    Addendum A – Product Authorization

     

    Producer is authorized to solicit and request quotes, request proposals, and submit applications for the following products and services: Discount Dental Plan Memberships,, Discount Vision Plan Memberships, Total Well Being Solutions, Premier Benefits Card, Payroll services, Property and Casualty, Workers Compensation, Group Life Products, Group Disability Products, Group Dental Products, Individual Medical Products, Individual Dental Products, Individual Disability, as of the Effective Date of this Agreement, in the state or states for which Producer is properly licensed, appointed and/or registered by Company (“Company Products”), as applicable. Company may at any time add to, delete from or otherwise alter the coverages, provisions or exclusions of any Company Products without the consent of Producer.

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