Limited Service Agreement

(a) A limited service agreement is an agreement between an insurer or its managing general agent and the agent of record on an association policy being acquired or assumed by the insurer, and which provides that the agent continue to provide service to the policyholder as authorized under Insurance Code Chapter 2210, Subchapter O.

(b) A limited service agreement must include the prevailing terms, conditions, and commissions of the agent that exist under the association plan of operation and guidelines at the time the policy is acquired or assumed by the insurer. The agreement will expire at the expiration of the third renewal of the insurer's policy.

(c) An appointment is not required for a limited service agreement if the agent only services association policies that have been assumed or transferred under this division and Insurance Code Chapter 2210, Subchapter O.

(d) This section does not prohibit the agent and insurer from agreeing to enter into an appointment and agent agreement on different terms.

(e) An insurer must be bound by the terms of a limited service agreement entered into by its managing general agent in accordance with subsection (a) of this section.

Source Note: The provisions of this §5.4304 adopted to be effective December 22, 2015, 40 TexReg 9296.