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External acquisition agent_program_guidelines
1. Proprietary & Confidential320058 04/20
EXTERNAL ACQUISITION AGENT
PROGRAM GUIDELINES
April 2020
This document contains proprietary information belonging to the Farmers®
Companies. It may not be copied or provided to
anyone other than the direct recipient, and the content may not be divulged to anyone without prior written authorization
from the Farmers Companies. You have the obligation to keep this document and its contents in a secure location.
Furthermore, while this document summarizes policies and contractual terms, the actual policies and contracts are the final
authority to the extent there are any inconsistencies.
2. Proprietary & Confidential320058 04/20
Table of Contents
Overview of the External Acquisition Agent Program....................................................................................................... 1
General Rules and Assignment Rules............................................................................................................................... 2
External Acquisition Bonus Program ............................................................................................................................... 2
Bonuses Available to All External Acquisition Agents........................................................................................................ 2
Exterior Branding Bonus Program.................................................................................................................................... 2
Signing Bonus Program................................................................................................................................................... 2
Bonuses Available to Some External Acquisition Agents................................................................................................... 3
Monthly Bonus Program.................................................................................................................................................. 3
Re-establishing Bonus Eligibility After Missing a Quarterly Goal....................................................................................... 9
Bonus While on Reserve or Associate Agent Program....................................................................................................... 9
Graduation Bonus Program............................................................................................................................................. 9
Monthly Marketing Bonus Program................................................................................................................................. 10
Typical Acquisitions Timeline........................................................................................................................................... 11
Frequently Asked Questions............................................................................................................................................ 12
3. 320058 04/20 Page 1 of 13 Proprietary & Confidential
OVERVIEW OF THE EXTERNAL ACQUISITION AGENT PROGRAM
The External Acquisition Agent Program is designed to attract capitalized entrepreneurs seeking an opportunity to acquire
their own Farmers®
agency. The External Acquisition Agent Program may also offer up to a 36-month bonus opportunity.
Program Provisions
To be eligible to sell their service and commission rights through this program, a Farmers agent must, prior to the effective
date of the sale, be:
1. Appointed pursuant to a 2013 agent appointment agreement (“AAA”) or a subsequent AAA;
2. In good standing with the Companies;
3. Clear of any liens or encumbrances on any estimated Contract Value, including any loan agreements with the Farmers
Insurance Group Federal Credit Union (“FIGFCU”) secured by any Contract Value; and
4. Clear of any debts to the Companies.
Recruiting Guidelines
Capital Requirements
Please reference the New Agent Capital Requirements Guidelines (329888).
Background Review
To be eligible for the External Acquisition Agent Program, potential candidates must first pass a background check in
accordance with current Farmers Insurance®
guidelines, policies, and procedures. The background check will cover four (4)
major areas, including, but not limited to:
• Financial History
• State and Federal Criminal History
• Regulatory Actions
• Motor Vehicle Report (MVR)
The review will include credit history and any criminal, employment, or business history. The review will also include various
federal and state regulatory and accrediting organization history, including, but not limited to, state insurance department
and securities industry experience. The candidate will need to pass all criteria as outlined in the Candidate Background,
Licensing and Registration Guidelines to be considered for this program. The current Candidate Background, Licensing and
Registration Guidelines (31-7672) can be found on the Agency Dashboard.
Appointment Requirements
Single Agent Storefront
The Reserve agent must have an approved, single agent location at full-time appointment.
Licensing Requirements
A Reserve agent must be fully licensed to convert to the External Acquisition Agent Program. A fully licensed agent will have
active Property, Casualty, Life, and Health licenses. Additionally, to be considered fully licensed, an agent may be required to
have any other licenses deemed necessary by the state in which the agent conducts business (e.g., a Broker license).
Staffing Requirements
At the time of final approval for conversion to the External Acquisition Agent Program, a Reserve agent must have a
minimum of one agency staff member who is licensed and appointed with the Companies.
University of Farmers®
Program-specific Reserve agent training should be completed prior to conversion to the External Acquisition Agent
Program.
New Agent Packet Requirements
All documents should be submitted in the order listed in the External Acquisition Program Documentation Checklist
(326259).
4. 320058 04/20 Page 2 of 13 Proprietary Confidential
EXTERNAL ACQUISITION AGENT PROGRAM GENERAL RULES
1. The sales price and terms of the sale are set exclusively by the buying and selling parties without any involvement by the
Companies.
2. With the exception of Life policies, all assigned policies will be subject to the same service commission rate applicable to
the buying agent on the effective date of the sale unless and until the commission schedules and rules established by the
Companies change or the Companies notify the buying agent of the different commission schedules and rules applicable
to the impacted policies. Life policies will be moved into the 5xx series, which pays no commissions.
3. Certain information in the selling agent’s eCMS account will be available to the buying agent, including information on
active Farmers®
policies. Information on Commercial policies cancelled over 90 days, data on Auto, Home, and Umbrella
policies cancelled over 430 days, and information on all other policies cancelled over 60 days will not be available to the
buying agent. Appointments, tasks, referrals, and quote information in the selling agent’s eCMS and SIMS accounts also
will not be available. It is the selling agent’s responsibility to remove any non-Farmers related information prior to the
effective date of the sale.
4. The Companies may, at their sole discretion, accept or decline a candidate.
5. The Companies may, at their sole discretion, approve or decline to approve the sale of any service and commission rights.
Such approval will not be unreasonably withheld.
6. Emails sent to the selling agent’s farmersagent.com email address may be forwarded to the buying agent for 60 days.
Emails sent to certain of the selling agent’s farmersagency.com individual staff email address(es) also may be forwarded
to the buying agent for 60 days upon request.
EXTERNAL ACQUISITION AGENT PROGRAM ASSIGNMENT RULES
1. Policies assigned in connection with an External Acquisition will be transferred into the buying agent’s primary agent
code in a “2” or “5” commission series code, except for policies in the “J” or “Y” commission series code which will
be assigned in the same “J” or “Y” commission series code. The commission rate(s) applicable to the policies will be
the service commission rate(s) applicable to the buying agent on the effective date of the sale unless and until the
commission schedules and rules established by the Companies change or the Companies notify the buying agent of the
different commission schedules and rules applicable to the assigned policies. Life insurance policies will be assigned in a
“5” commission series code.
2. Assigned policies may be treated differently than policies written in the buying agent’s 3xx or agency producer series
codes for Achievement Club award and bonus opportunity purposes. Please review the applicable rules of each
Achievement Club, bonus, or promotion opportunity for details.
3. Any chargebacks or other related fees charged to the agent for the assigned policies are the full responsibility of the
buying agent.
4. Any open claims or reserves will follow the assigned agent number.
EXTERNAL ACQUISITION BONUS PROGRAM
There are several types of bonus opportunities available to External Acquisition Agent Program agents. Some bonus
opportunities are available to all such agents, and others are available only to those agents who purchased a certain number
of service and commission rights.
BONUSES AVAILABLE TO ALL EXTERNAL ACQUISITION AGENTS
Exterior Branding Bonus Program
The Exterior Branding Bonus Program is designed to assist newly appointed Farmers®
agents with their initial exterior
branding, consistent with the Farmers trademark and brand guidelines, for their approved office location. Farmers is willing
to coordinate all aspects of the initial exterior branding options and execution with the Farmers-approved sign vendor, and to
pay for applicable costs up to a $6,000 maximum possible bonus amount.
Signing Bonus Program
In Month 2 following the Addendum Effective Date, the agent is eligible to receive a $5,000 Signing Bonus. Agent will not be
eligible to receive this bonus again should a new agent appointment agreement be offered and executed.
5. 320058 04/20 Page 3 of 13 Proprietary Confidential
BONUSES AVAILABLE TO SOME EXTERNAL ACQUISITION AGENTS
An agent may be eligible for additional bonus opportunities if the number of Purchased Service and Commissions Rights
excluding those related to life insurance policies issued by Farmers New World Life Insurance Company (“Adjusted Number
of Purchased Service and Commission Rights”) is less than 1,000 per the Statement of Operations report.
Monthly Bonus Program
Starting in the agent’s first month and continuing through the applicable month after the Addendum Effective Date set forth
below (“Bonus Eligibility Period”), which period depends on the Adjusted Number of Purchased Service and Commission
Rights and is subject to modification by the Companies at any time in their sole discretion, the agent may qualify for a
Monthly Bonus Program.
Adjusted Number of Purchased Service
and Commission Rights
Number of Quarters in
Bonus Eligibility Period
1 – 99 12
100 – 199 10
200 – 299 9
300 – 399 8
400 – 499 7
500 – 599 6
600 – 699 5
700 – 799 4
800 – 899 3
900 – 999 2
During the Bonus Eligibility Period, the Companies will pay the agent a bonus based on a percentage of the agent’s monthly
net new business Property and Casualty (“PC”) commissions and monthly net new business Life commissions excluding
Annuities in accordance with schedules and rules established by the Companies and in effect on the effective date of the
applicable new business transaction.
The total monthly bonus payment, if any, will not include any amounts exceeding the maximum monthly bonus payment
amounts for specific types of business established by the Companies from time to time in their sole discretion as set forth in
the chart below.
Life and Commercial Maximum Monthly Bonus Payment
Year 1 Year 2 Year 3
Life $1,400 $1,250 $1,000
Commercial $3,500 $3,000 $2,500
The quarterly percentage of monthly net new business commissions used to calculate the agent’s bonus, if any, will apply to
each three-month period after the agent’s appointment date (not calendar quarters). The applicable quarterly percentage
will be based on the agent’s net new business commission and Life Issued and Paid results and corresponding Tier Placement
at the end of the previous quarter. In the agent’s first quarter after Addendum Effective Date, the percentage of monthly
net new business commissions used to calculate the agent’s bonus will be the applicable Tier A percentage for the agent’s
area. To receive a bonus based on a percentage of monthly net new business commissions, less any amounts exceeding the
applicable maximum monthly bonus payment amounts for specific types of business, as a bonus in subsequent quarters, the
agent must achieve Tier C, or higher, requirements.
Net new business commissions are calculated based on the agent’s 3xx and agency producer series PC and Life net issued
new business policies as of the closing dates for the insuring entities issuing the policies and as reflected in the agent’s
folio. Monthly net new business commission is defined as the net new business commissions for the applicable PC and
Life net issued new business policies as set forth in the agent’s folio. The following are excluded from the net new business
commission calculations: (i) any fees that are not considered for commission purposes; and (ii) premium and policies
associated with (a) any Farmers Financial Solutions, LLC (“FFS”) offerings, (b) Flood insurance, (c) any Kraft Lake Insurance
Agency, Inc. (“Kraft Lake”) business, (d) any 21st Century® Insurance offerings, and (e) the California Earthquake Authority
(“CEA”).
Any bonus will be paid on the next folio after each applicable month.
*Life issued and paid quarterly bonus program requirements do not apply to the States of Florida, Connecticut and New York.
6. 320058 04/20 Page 4 of 13 Proprietary Confidential
External Acquisition Agent Program Monthly Bonus Program Charts
The area assignments may be different for the Net New Business Commission Bonus Percentages and the Net New Business
Commission and Life Issued and Paid Quarterly Bonus Program Requirements.
Net New Business Commission Bonus Percentages: Percentages Area 0
*1-99 Q1 Q2 Q3 Q4 Q5 Q6 Q7 Q8 Q9 Q10 Q11 Q12
Tier A
Tier B
Tier C
Tier D
Life Cap**
Commercial Cap**
300%
300%
300%
0%
$1,400
$3,500
300%
270%
240%
0%
$1,400
$3,500
300%
270%
240%
0%
$1,400
$3,500
300%
270%
240%
0%
$1,400
$3,500
180%
162%
144%
0%
$1,250
$3,000
180%
162%
144%
0%
$1,250
$3,000
180%
162%
144%
0%
$1,250
$3,000
180%
162%
144%
0%
$1,250
$3,000
60%
54%
48%
0%
$1,000
$2,500
60%
54%
48%
0%
$1,000
$2,500
60%
54%
48%
0%
$1,000
$2,500
60%
54%
48%
0%
$1,000
$2,500
*100-199 Q1 Q2 Q3 Q4 Q5 Q6 Q7 Q8 Q9 Q10
Tier A
Tier B
Tier C
Tier D
Life Cap**
Commercial Cap**
300%
300%
300%
0%
$1,400
$3,500
300%
270%
240%
0%
$1,400
$3,500
180%
162%
144%
0%
$1,250
$3,000
180%
162%
144%
0%
$1,250
$3,000
180%
162%
144%
0%
$1,250
$3,000
180%
162%
144%
0%
$1,250
$3,000
60%
54%
48%
0%
$1,000
$2,500
60%
54%
48%
0%
$1,000
$2,500
60%
54%
48%
0%
$1,000
$2,500
60%
54%
48%
0%
$1,000
$2,500
*200-299 Q1 Q2 Q3 Q4 Q5 Q6 Q7 Q8 Q9
Tier A
Tier B
Tier C
Tier D
Life Cap**
Commercial Cap**
300%
300%
300%
0%
$1,400
$3,500
180%
162%
144%
0%
$1,250
$3,000
180%
162%
144%
0%
$1,250
$3,000
180%
162%
144%
0%
$1,250
$3,000
180%
162%
144%
0%
$1,250
$3,000
60%
54%
48%
0%
$1,000
$1,250
60%
54%
48%
0%
$1,000
$2,500
60%
54%
48%
0%
$1,000
$2,500
60%
54%
48%
0%
$1,000
$2,500
*300-399 Q1 Q2 Q3 Q4 Q5 Q6 Q7 Q8
Tier A
Tier B
Tier C
Tier D
Life Cap**
Commercial Cap**
180%
180%
180%
0%
$1,250
$3,000
180%
162%
144%
0%
$1,250
$3,000
180%
162%
144%
0%
$1,250
$3,000
180%
162%
144%
0%
$1,250
$3,000
60%
54%
48%
0%
$1,000
$2,500
60%
54%
48%
0%
$1,000
$2,500
60%
54%
48%
0%
$1,000
$2,500
60%
54%
48%
0%
$1,000
$2,500
*400-499 Q1 Q2 Q3 Q4 Q5 Q6 Q7
Tier A
Tier B
Tier C
Tier D
Life Cap**
Commercial Cap**
180%
180%
180%
0%
$1,250
$3,000
180%
162%
144%
0%
$1,250
$3,000
180%
162%
144%
0%
$1,250
$3,000
60%
54%
48%
0%
$1,000
$2,500
60%
54%
48%
0%
$1,000
$2,500
60%
54%
48%
0%
$1,000
$2,500
60%
54%
48%
0%
$1,000
$2,500
*500-599 Q1 Q2 Q3 Q4 Q5 Q6
Tier A
Tier B
Tier C
Tier D
Life Cap**
Commercial Cap**
180%
180%
180%
0%
$1,250
$3,000
180%
162%
144%
0%
$1,250
$3,000
60%
54%
48%
0%
$1,000
$2,500
60%
54%
48%
0%
$1,000
$2,500
60%
54%
48%
0%
$1,000
$2,500
60%
54%
48%
0%
$1,000
$2,500
*600-699 Q1 Q2 Q3 Q4 Q5
Tier A
Tier B
Tier C
Tier D
Life Cap**
Commercial Cap**
180%
180%
180%
0%
$1,250
$3,000
60%
54%
48%
0%
$1,000
$2,500
60%
54%
48%
0%
$1,000
$2,500
60%
54%
48%
0%
$1,000
$2,500
60%
54%
48%
0%
$1,000
$2,500
*700-799 Q1 Q2 Q3 Q4
Tier A
Tier B
Tier C
Tier D
Life Cap**
Commercial Cap**
60%
60%
60%
0%
$1,000
$2,500
60%
54%
48%
0%
$1,000
$2,500
60%
54%
48%
0%
$1,000
$2,500
60%
54%
48%
0%
$1,000
$2,500
*800-899 Q1 Q2 Q3
Tier A
Tier B
Tier C
Tier D
Life Cap**
Commercial Cap**
60%
60%
60%
0%
$1,000
$2,500
60%
54%
48%
0%
$1,000
$2,500
60%
54%
48%
0%
$1,000
$2,500
*900-999 Q1 Q2
Tier A
Tier B
Tier C
Tier D
Life Cap**
Commercial Cap**
60%
60%
60%
0%
$1,000
$2,500
60%
54%
48%
0%
$1,000
$2,500
*Adjusted Number of Purchased Service and Commission Rights
**Refers to Life and Commercial maximum monthly bonus payments
7. 320058 04/20 Page 5 of 13 Proprietary Confidential
Net New Business Commission Bonus Percentages: Percentages Area 1
*1-99 Q1 Q2 Q3 Q4 Q5 Q6 Q7 Q8 Q9 Q10 Q11 Q12
Tier A
Tier B
Tier C
Tier D
Life Cap**
Commercial Cap**
360%
360%
360%
0%
$1,400
$3,500
360%
324%
288%
0%
$1,400
$3,500
360%
324%
288%
0%
$1,400
$3,500
360%
324%
288%
0%
$1,400
$3,500
216%
194%
173%
0%
$1,250
$3,000
216%
194%
173%
0%
$1,250
$3,000
216%
194%
173%
0%
$1,250
$3,000
216%
194%
173%
0%
$1,250
$3,000
72%
65%
58%
0%
$1,000
$2,500
72%
65%
58%
0%
$1,000
$2,500
72%
65%
58%
0%
$1,000
$2,500
72%
65%
58%
0%
$1,000
$2,500
*100-199 Q1 Q2 Q3 Q4 Q5 Q6 Q7 Q8 Q9 Q10
Tier A
Tier B
Tier C
Tier D
Life Cap**
Commercial Cap**
360%
360%
360%
0%
$1,400
$3,500
360%
324%
288%
0%
$1,400
$3,500
216%
194%
173%
0%
$1,250
$3,000
216%
194%
173%
0%
$1,250
$3,000
216%
194%
173%
0%
$1,250
$3,000
216%
194%
173%
0%
$1,250
$3,000
72%
65%
58%
0%
$1,000
$2,500
72%
65%
58%
0%
$1,000
$2,500
72%
65%
58%
0%
$1,000
$2,500
72%
65%
58%
0%
$1,000
$2,500
*200-299 Q1 Q2 Q3 Q4 Q5 Q6 Q7 Q8 Q9
Tier A
Tier B
Tier C
Tier D
Life Cap**
Commercial Cap**
360%
360%
360%
0%
$1,400
$3,500
216%
194%
173%
0%
$1,250
$3,000
216%
194%
173%
0%
$1,250
$3,000
216%
194%
173%
0%
$1,250
$3,000
216%
194%
173%
0%
$1,250
$3,000
72%
65%
58%
0%
$1,000
$2,500
72%
65%
58%
0%
$1,000
$2,500
72%
65%
58%
0%
$1,000
$2,500
72%
65%
58%
0%
$1,000
$2,500
*300-399 Q1 Q2 Q3 Q4 Q5 Q6 Q7 Q8
Tier A
Tier B
Tier C
Tier D
Life Cap**
Commercial Cap**
216%
216%
216%
0%
$1,250
$3,000
216%
194%
173%
0%
$1,250
$3,000
216%
194%
173%
0%
$1,250
$3,000
216%
194%
173%
0%
$1,250
$3,000
72%
65%
58%
0%
$1,000
$2,500
72%
65%
58%
0%
$1,000
$2,500
72%
65%
58%
0%
$1,000
$2,500
72%
65%
58%
0%
$1,000
$2,500
*400-499 Q1 Q2 Q3 Q4 Q5 Q6 Q7
Tier A
Tier B
Tier C
Tier D
Life Cap**
Commercial Cap**
216%
216%
216%
0%
$1,250
$3,000
216%
194%
173%
0%
$1,250
$3,000
216%
194%
173%
0%
$1,250
$3,000
72%
65%
58%
0%
$1,000
$2,500
72%
65%
58%
0%
$1,000
$2,500
72%
65%
58%
0%
$1,000
$2,500
72%
65%
58%
0%
$1,000
$2,500
*500-599 Q1 Q2 Q3 Q4 Q5 Q6
Tier A
Tier B
Tier C
Tier D
Life Cap**
Commercial Cap**
216%
216%
216%
0%
$1,250
$3,000
216%
194%
173%
0%
$1,250
$3,000
72%
65%
58%
0%
$1,000
$2,500
72%
65%
58%
0%
$1,000
$2,500
72%
65%
58%
0%
$1,000
$2,500
72%
65%
58%
0%
$1,000
$2,500
*600-699 Q1 Q2 Q3 Q4 Q5
Tier A
Tier B
Tier C
Tier D
Life Cap**
Commercial Cap**
216%
216%
216%
0%
$1,250
$3,000
72%
65%
58%
0%
$1,000
$2,500
72%
65%
58%
0%
$1,000
$2,500
72%
65%
58%
0%
$1,000
$2,500
72%
65%
58%
0%
$1,000
$2,500
*700-799 Q1 Q2 Q3 Q4
Tier A
Tier B
Tier C
Tier D
Life Cap**
Commercial Cap**
72%
72%
72%
0%
$1,000
$2,500
72%
65%
58%
0%
$1,000
$2,500
72%
65%
58%
0%
$1,000
$2,500
72%
65%
58%
0%
$1,000
$2,500
*800-899 Q1 Q2 Q3
Tier A
Tier B
Tier C
Tier D
Life Cap**
Commercial Cap**
72%
72%
72%
0%
$1,000
$2,500
72%
65%
58%
0%
$1,000
$2,500
72%
65%
58%
0%
$1,000
$2,500
*900-999 Q1 Q2
Tier A
Tier B
Tier C
Tier D
Life Cap**
Commercial Cap**
72%
72%
72%
0%
$1,000
$2,500
72%
65%
58%
0%
$1,000
$2,500
*Adjusted Number of Purchased Service and Commission Rights
**Refers to Life and Commercial maximum monthly bonus payments
10. 320058 04/20 Page 8 of 13 Proprietary Confidential
Net New Business Commission and Life Issued and Paid Quarterly Bonus Program Requirements:
Requirements Area 3
*1-99 Q1 Q2 Q3 Q4 Q5 Q6 Q7 Q8 Q9 Q10 Q11 Q12
Tier A 9,000 / 3 9,000 / 3 9,000 / 3 9,000 / 3 10,800 / 4 10,800 / 4 10,800 / 4 10,800 / 4 13,500 / 5 13,500 / 5 13,500 / 5 13,500 / 5
Tier B 6,300 / 2 6,300 / 2 6,300 / 2 6,300 / 2 7,650 / 3 7,650 / 3 7,650 / 3 7,650 / 3 10,800 / 4 10,800 / 4 10,800 / 4 10,800 / 4
Tier C 2,700 / 1 2,700 / 1 2,700 / 1 2,700 / 1 4,500 / 2 4,500 / 2 4,500 / 2 4,500 / 2 6,750 / 3 6,750 / 3 6,750 / 3 6,750 / 3
Tier D - - - - - - - - - - - -
*100-199 Q1 Q2 Q3 Q4 Q5 Q6 Q7 Q8 Q9 Q10
Tier A 9,000 / 3 9,000 / 3 9,000 / 3 9,000 / 3 10,800 / 4 10,800 / 4 10,800 / 4 10,800 / 4 13,500 / 5 13,500 / 5
Tier B 6,300 / 2 6,300 / 2 6,300 / 2 6,300 / 2 7,650 / 3 7,650 / 3 7,650 / 3 7,650 / 3 10,800 / 4 10,800 / 4
Tier C 2,700 / 1 2,700 / 1 2,700 / 1 2,700 / 1 4,500 / 2 4,500 / 2 4,500 / 2 4,500 / 2 6,750 / 3 6,750 / 3
Tier D - - - - - - - - - -
*200-299 Q1 Q2 Q3 Q4 Q5 Q6 Q7 Q8 Q9
Tier A 9,000 / 3 9,000 / 3 9,000 / 3 9,000 / 3 10,800 / 4 10,800 / 4 10,800 / 4 10,800 / 4 13,500 / 5
Tier B 6,300 / 2 6,300 / 2 6,300 / 2 6,300 / 2 7,650 / 3 7,650 / 3 7,650 / 3 7,650 / 3 10,800 / 4
Tier C 2,700 / 1 2,700 / 1 2,700 / 1 2,700 / 1 4,500 / 2 4,500 / 2 4,500 / 2 4,500 / 2 6,750 / 3
Tier D - - - - - - - - -
*300-399 Q1 Q2 Q3 Q4 Q5 Q6 Q7 Q8
Tier A 9,000 / 3 9,000 / 3 9,000 / 3 9,000 / 3 10,800 / 4 10,800 / 4 10,800 / 4 10,800 / 4
Tier B 6,300 / 2 6,300 / 2 6,300 / 2 6,300 / 2 7,650 / 3 7,650 / 3 7,650 / 3 7,650 / 3
Tier C 2,700 / 1 2,700 / 1 2,700 / 1 2,700 / 1 4,500 / 2 4,500 / 2 4,500 / 2 4,500 / 2
Tier D - - - - - - - -
*400-499 Q1 Q2 Q3 Q4 Q5 Q6 Q7
Tier A 9,000 / 3 9,000 / 3 9,000 / 3 9,000 / 3 10,800 / 4 10,800 / 4 10,800 / 4
Tier B 6,300 / 2 6,300 / 2 6,300 / 2 6,300 / 2 7,650 / 3 7,650 / 3 7,650 / 3
Tier C 2,700 / 1 2,700 / 1 2,700 / 1 2,700 / 1 4,500 / 2 4,500 / 2 4,500 / 2
Tier D - - - - - - -
*500-599 Q1 Q2 Q3 Q4 Q5 Q6
Tier A 9,000 / 3 9,000 / 3 9,000 / 3 9,000 / 3 10,800 / 4 10,800 / 4
Tier B 6,300 / 2 6,300 / 2 6,300 / 2 6,300 / 2 7,650 / 3 7,650 / 3
Tier C 2,700 / 1 2,700 / 1 2,700 / 1 2,700 / 1 4,500 / 2 4,500 / 2
Tier D - - - - - -
*600-699 Q1 Q2 Q3 Q4 Q5
Tier A 9,000 / 3 9,000 / 3 9,000 / 3 9,000 / 3 10,800 / 4
Tier B 6,300 / 2 6,300 / 2 6,300 / 2 6,300 / 2 7,650 / 3
Tier C 2,700 / 1 2,700 / 1 2,700 / 1 2,700 / 1 4,500 / 2
Tier D - - - - -
*700-799 Q1 Q2 Q3 Q4
Tier A 9,000 / 3 9,000 / 3 9,000 / 3 9,000 / 3
Tier B 6,300 / 2 6,300 / 2 6,300 / 2 6,300 / 2
Tier C 2,700 / 1 2,700 / 1 2,700 / 1 2,700 / 1
Tier D - - - -
*800-899 Q1 Q2 Q3
Tier A 9,000 / 3 9,000 / 3 9,000 / 3
Tier B 6,300 / 2 6,300 / 2 6,300 / 2
Tier C 2,700 / 1 2,700 / 1 2,700 / 1
Tier D - - -
*900-999 Q1 Q2
Tier A 9,000 / 3 9,000 / 3
Tier B 6,300 / 2 6,300 / 2
Tier C 2,700 / 1 2,700 / 1
Tier D - -
*Adjusted Number of Purchased Service and Commission Rights
Requirements Area and Percentages Area may be reflected as a single number on some reports, with the first digit
representing the Percentages Area and the second digit representing the Requirements Area. For example, Percentages
Area 1 and Requirements Area 3 may be combined to show Area 13, and Percentages Area 0 and Requirements Area 2 may
be combined to show Area 02 or Area 2.
11. 320058 04/20 Page 9 of 13 Proprietary Confidential
Re-establishing Bonus Eligibility After Missing a Quarterly Goal
To be eligible for monthly bonuses, the Acquisition agent must achieve the Tier C or higher quarterly bonus requirements for
each specified quarter. If an Acquisition agent fails to achieve the Tier C or higher quarterly bonus requirements for their area
in any specified quarter, they will not receive any monthly bonuses in the following quarter. If an agent achieves the Tier C
goals or higher in any quarter following a quarter where bonus requirements were not met, the agent will then be eligible for
a monthly bonus in the next quarter, if all other bonus eligibility requirements are met.
Validation of goal achievements will take place on a quarterly basis. No mid-quarter bonus re-establishment requests will be
processed or approved.
Bonus Based on Net New Business Commissions While on Reserve Agent or Associate Agent Program
In Month 5 following the Addendum Effective Date of the New Purchase of Service and Commission Rights Bonus Program
Addendum to Agent Appointment Agreement, the agent is eligible to receive a one-time bonus based on applicable net
new business commissions achieved during the Reserve and/or Associate agent program immediately prior to becoming
an Acquisition agent and on the agent’s Tier Placement achieved based on performance during the first quarter on the
External Acquisition Agent Program, up to a maximum aggregate bonus payment amount of $30,000 (“Maximum Aggregate
Bonus Payment Amount”). The Maximum Aggregate Bonus Payment Amount will not include any amounts exceeding the
maximum bonus payment amounts for specific types of business established by the Companies from time to time in their
sole discretion as set forth in the chart below.
Life and Commercial Maximum Reserve or Associate Agent Bonus Amounts
Life $3,000
Commercial $7,500
For example, if an agent has $5,000 in applicable net new business commissions during the Reserve or Associate agent
program and achieves a Tier A bonus percentage of 300% for the second quarter on the External Acquisition Agent Program
based on Percentages Area 0 and twelve (12) quarters in the Bonus Eligibility Period, then the agent would receive a one-
time bonus in the amount of $15,000 in the 5th month, subject to the Life and Commercial Maximum Reserve or Associate
Agent Bonus Amounts. If the agent fails to achieve the Tier C or higher quarterly bonus requirements for their second quarter
based on their performance in the first quarter on the External Acquisition Agent Program, then the agent would not be
eligible for this one-time bonus. An agent must achieve Tier C or higher production results in their first quarter following
Acquisition agent appointment to be eligible for this bonus based on net new business commissions achieved during the
Reserve or Associate agent program.
Net new business commissions are calculated based on the agent’s 3xx and agency producer series PC and Life net issued
new business policies as of the closing dates for the insuring entities issuing the policies and as reflected in the agent’s
folio. The following are excluded from the net new business commission calculations: (i) any fees that are not considered for
commission purposes; and (ii) premium and policies associated with (a) any FFS offerings, (b) Flood insurance, (c) any Kraft
Lake business, (d) any 21st Century Insurance offerings, and (e) the CEA.
Graduation Bonus Program
Acquisition agents also may be eligible to receive a bonus based on their applicable net new business commissions and the
number of issued and paid Life policies if the agent achieves the Tier A, B, or C applicable bonus requirements at the end of
the Bonus Eligibility Period. Tier determination at the end of the Bonus Eligibility Period is independent of the quarterly Tier
Placement at the end of the Bonus Eligibility Period.
Any bonus for the applicable period will be determined in accordance with the chart below.
12. 320058 04/20 Page 10 of 13 Proprietary Confidential
Graduation Bonus Program Requirements
Tier A Tier B Tier C All Tiers All Tiers
Requirements
Area
Bonus Eligibility
Quarters
Life Issued
and Paid
Net NB
Commissions
Life Issued
and Paid
Net NB
Commissions
Life Issued
and Paid
Net NB
Commissions
Commercial Maximum
Graduation Bonus Payment
Life Maximum
Graduation Bonus Payment
Requirements
Area 1
12
10
9
8
7
6
5
4
3
2
48
38
33
28
24
20
16
12
9
6
$148,000
$118,000
$103,000
$88,000
$76,000
$64,000
$52,000
$40,000
$30,000
$20,000
36
28
24
20
17
14
11
8
6
4
$110,000
$86,000
$74,000
$62,000
$53,500
$45,000
$36,500
$28,000
$21,000
$14,000
24
18
15
12
10
8
6
4
3
2
$62,000
$47,000
$39,500
$32,000
$27,000
$22,000
$17,000
$12,000
$9,000
$6,000
$30,000
$26,250
$24,375
$22,500
$20,000
$17,500
$15,000
$12,500
$9,375
$6,250
$13,500
$12,000
$11,250
$10,500
$9,375
$8,250
$7,125
$6,000
$4,500
$3,000
Requirements
Area 2
12
10
9
8
7
6
5
4
3
2
48
38
33
28
24
20
16
12
9
6
$140,600
$112,100
$97,850
$83,600
$72,200
$60,800
$49,400
$38,000
$28,500
$19,000
36
28
24
20
17
14
11
8
6
4
$104,500
$81,700
$70,300
$58,900
$50,825
$42,750
$34,675
$26,600
$19,950
$13,300
24
18
15
12
10
8
6
4
3
2
$58,900
$44,650
$37,525
$30,400
$25,650
$20,900
$16,150
$11,400
$8,550
$5,700
$30,000
$26,250
$24,375
$22,500
$20,000
$17,500
$15,000
$12,500
$9,375
$6,250
$13,500
$12,000
$11,250
$10,500
$9,375
$8,250
$7,125
$6,000
$4,500
$3,000
Requirements
Area 3
12
10
9
8
7
6
5
4
3
2
48
38
33
28
24
20
16
12
9
6
$133,200
$106,200
$92,700
$79,200
$68,400
$57,600
$46,800
$36,000
$27,000
$18,000
36
28
24
20
17
14
11
8
6
4
$99,000
$77,400
$66,600
$55,800
$48,150
$40,500
$32,850
$25,200
$18,900
$12,600
24
18
15
12
10
8
6
4
3
2
$55,800
$42,300
$35,550
$28,800
$24,300
$19,800
$15,300
$10,800
$8,100
$5,400
$30,000
$26,250
$24,375
$22,500
$20,000
$17,500
$15,000
$12,500
$9,375
$6,250
$13,500
$12,000
$11,250
$10,500
$9,375
$8,250
$7,125
$6,000
$4,500
$3,000
*Life issued and paid Graduation Bonus Program Requirements do not apply to the States of Florida, Connecticut and New York.
Net New Business Commission Bonus Percentages
Tier A Tier B Tier C
Percentage Area 0 60% 50% 40%
Percentage Area 1 70% 60% 50%
The area assignments may be different for the Net New Business Commission Bonus Percentages and the
Net New Business Commission and Life Issued and Paid Graduation Bonus Program Requirements.
In addition, the total Graduation Bonus payment, if any, will not include any amounts exceeding the applicable maximum
bonus payment amounts for specific types of business established by the Companies from time to time in their sole
discretion as set forth in the chart above.
Applicable net new business commissions are calculated based on the agent’s 3xx and agency producer series PC and
Life net issued new business policies as of the closing dates for the insuring entities issuing the policies and as reflected
in the agent’s folio. The following are excluded from the net new business commission calculations: (i) any fees that are
not considered for commission purposes; and (ii) premium and policies associated with (a) any FFS offerings, (b) Flood
insurance, (c) any Kraft Lake business, (d) any 21st Century Insurance offerings, and (e) the CEA.
Any bonus will be paid on the next 12 folios after the calculation (the total bonus amount will be divided by 12 and the
resulting amount will be paid monthly).
Monthly Marketing Bonus Program
During the Bonus Eligibility Period, if the agent achieves Tier C or higher quarterly bonus requirements, the agent will
receive a monthly marketing bonus amount of $300. If the agent fails to achieve Tier C or higher bonus requirements,
the monthly marketing bonus payments will cease. The monthly marketing bonus payments will resume when the agent
achieves Tier C or higher quarterly bonus requirements.
Additional Provisions
The agent must be current on applicable training programs, meet other requirements and standards, as determined by the
Companies, and be active as an agent for and in good standing with the Companies at the time of any bonus payout to be
eligible to receive any applicable bonus payment. To be in good standing, the agent must meet criteria established by the
Companies in their sole discretion. Among other things, the agent must have active, intact binding authority, must not have
received a notice of termination of his or her appointment agreement from the Companies, and must not be the subject of an
investigation involving potential misconduct.
13. 320058 04/20 Page 11 of 13 Proprietary Confidential
If the agent fails to establish a professional, Farmers-branded office in compliance with Farmers brand standards within 6
months of the Addendum Effective Date, all bonus payments will cease. If the agent establishes a professional, Farmers-
branded office in compliance with Farmers brand standards, and subsequently does not have a professional, Farmers-
branded office in compliance with Farmers brand standards, such as if additional non-compliant signage was installed, all
bonus payments will cease.
If the agent subsequently establishes a professional, Farmers-branded office in compliance with Farmers brand standards
after 6 months from Addendum Effective Date, the agent will be eligible to receive applicable bonus payments in the
following program quarter, if all other requirements are met, but the agent will not receive any retroactive bonus payments.
For example, if the agent establishes a professional, Farmers-branded office in compliance with Farmers brand standards 7
months after Addendum Effective Date, the agent will not receive the Agency Start-Up Bonus. The agent also will not receive
bonus payments from other bonus programs during their third quarter on the External Acquisition Agent Program. The
agent will be eligible to receive applicable bonus payments in their fourth quarter on the External Acquisition Agent Program
if all other requirements are met.
Program Change or Termination
The terms and conditions of the External Acquisition Agent Program and any associated bonus programs are subject to
change— including, without limitation, program termination—at any time in the Companies’ sole discretion. Such revisions
or program termination may be communicated in bulletins, email or other media.
Typical Acquisitions Timeline
Minimum of 45 Days Prior to Addendum Effective Date
l Buyer must be fully licensed and appointed
l District Manager (“DM”) or Area Sales Leader (“ASL”) submits sale in Agents Commission Exchange (“ACE”)
l Territory completes preliminary approval in ACE
Minimum of 30 Days Prior to Addendum Effective Date
l Contracts and required documents due to Agency Services
l Territory provides final approval through the completion of contracts
Minimum of 15 Days Prior to Addendum Effective Date
l Verification of a minimum of one licensed and appointed agency staff member
l Verification of an approved, single agent storefront location
l Clearance of any debts owed to the Companies and any liens or encumbrances on any estimated Contract Value
Minimum of 5 Days Prior to Addendum Effective Date
l Agent completes Acquisition training and/or webinar
14. 320058 04/20 Page 12 of 13 Proprietary Confidential
FREQUENTLY ASKED QUESTIONS
Q. What is considered “good standing with the Companies”?
A. To be in good standing, an agent must meet criteria established by the Companies in their sole discretion. Among other
things, an agent must be current on any applicable training programs, must have unrestricted binding authority, must
not have received a notice of termination of their appointment agreement from the Companies, and must not be the
subject of an investigation involving potential misconduct.
Q. Can an agent sell rights to business written through Kraft Lake Insurance Agency, Inc. (“Kraft Lake”)?
A. Yes. However, this can only be done by contacting Kraft Lake directly.
Q. Will the Companies finance the purchase of service and commission rights?
A. No. The Companies will not finance a purchase; however, the FIGFCU, among other financial institutions, may be able to
assist with financing.
Q. Is there a minimum or a maximum purchase price?
A. No. The Companies are not involved in negotiating or setting the price.
Q. What series codes will policies assigned in connection with an External Acquisition have?
A. The following series codes will be used to identify policies assigned in connection with acquisitions of service and
commission rights:
l Full commission series policies assigned through an External Acquisition will have a “2” code.
l Partial commission series policies assigned through an External Acquisition will have a “5” code, with the exception of
policies in the codes noted below.
l Life policies assigned through External Acquisitions will have a “5” code and will not receive any commissions.
l Policies in the “J” commission series code assigned through an External Acquisition will have a “J” code.
l Policies in the “Y” commission series code assigned through an External Acquisition will have a “Y” code.
Q. Can an agent purchase the service and commission rights associated with multiple groups of policies?
A. Yes. There is no limit to the number of policies that can be assigned through the program. Each proposed sale will be
reviewed individually. The purchase of additional service and commission rights with an associated policy assignment
effective date within 120 days of the initial purchase date will be treated as an External Acquisition. Any such additional
purchase requires approval from Home Office.
Q. Will the Family Transfer provision remain in effect?
A. For those agents appointed pursuant to a pre-2013 agent appointment agreement, the Family Transfer provision will
remain in effect, and there are no bonus programs available for agents purchasing service and commission rights through
the Family Transfer provision. The 2013 and later agent appointment agreements do not include the Family Transfer
provision, and a sale of service and commission rights from an agent on a 2013 or later agent appointment agreement to
a family member would be considered an Acquisition.
Q. Will all lines of business be available for assignment pursuant to the External Acquisition Agent Program?
A. All lines of business underwritten by the Companies are available for assignment through the External Acquisition Agent
Program. Policies placed through Kraft Lake can be assigned by working directly with Kraft Lake.
Q. What happens if I finance the sale of my service and commission rights and the buyer defaults?
A. The sale is between the selling and buying agents exclusively, and the Companies will not intervene. However, the
Companies can reappoint the selling agent and, if both the selling and buying agent agree, reassign the service
and commission rights back to the selling agent. The selling agent will need to go through the Companies’ current
reappointment process.
Q. Will email sent to the selling agent’s farmersagent.com email address be forwarded to the buyer?
A. Email sent to the selling agent’s farmersagent.com email address may be forwarded to the buying agent for 60 days.
Emails sent to certain of the selling agent’s farmersagency.com individual staff email address(es) also may be forwarded
to the buying agent for 60 days upon request. Only new emails to the seller’s farmersagent.com email address or
farmersagency.com staff email address(es) are forwarded to the buyer.
15. 320058 04/20 Page 13 of 13 Proprietary Confidential
Q. When will the selling agent receive their final folio payment?
A. The selling agent receives their final folio payment on the 1st of the month prior to the effective date of the Acquisition.
Q. When will the buying agent receive their initial folio?
A. In most cases, the buying agent’s first Acquisition folio should be processed automatically and at the same time as normal
folios. On rare occasions, it may be necessary for Accounting to complete a manual calculation. In these cases, any folio
and payment processing should be completed within 5-7 business days following the effective date of the Acquisition.
Q. Will a partial Acquisition impact a seller’s results for incentive program and performance tracking
purposes?
A. Reference the resources and guidelines available on the Agency Dashboard for current information related to applicable
incentive programs.
Q. Can the seller’s debt to the Companies be assumed by the buying agent?
A. The selling agent’s debt to the Companies can be assumed by the buying agent subject to (i) the Companies’ approval,
which may be withheld at the sole discretion of the Companies, (ii) the selling agent’s personal guaranty, and (iii) the
Companies’ procedures in place at the time of any sale.
