Frequently Asked Questions
- Who is the Insurer?
- Who is Covered?
- What Professional Services are covered?
- What if my contract is terminated?
- What is my deductible?
- What are some of the important conditions on policy coverage?
- What happens if my Agent's contract is terminated with Midland or North American during the policy period?
1. Who is the Insurer?
Zurich American Insurance Company, which is a member of Zurich Financial Services, is the insurer of this program. Zurich American Insurance Company (hereinafter “Zurich”) has been assigned an A.M. Best Rating of A (Excellent) as of September 30, 2009.
Agents
You, the agent of Midland National Life Insurance Company (hereinafter “Midland”) and North American Company for Life and Health Insurance (hereinafter “North American”), provided you have enrolled in the program and paid the appropriate premium.
Your Corporation
Any corporation, partnership, or other business entity, which is owned or controlled by you would be covered. Coverage, however, only applies to those operations of the business entity directly related to the professional services covered herein and provided by you or an employee acting on your behalf and within the scope of his/her duties.
Your Employees
Any of your secretarial, clerical or administrative employees, solely for services performed within their capacity as such and on your behalf, and provided that they do not receive any commission income.
Important Note: Employees and Corporations do not have their own limits; they share the coverage afforded to the Agent.
3. What Professional Services are covered?
Professional Services shall include the sale, attempted sale or servicing of:
1. Life insurance, accident and health insurance, disability income insurance and annuities;
2. Variable insurance products, including but not limited to variable annuities, flexible and scheduled premium annuities and variable life insurance;
3. Employee benefit plans funded with covered products;
4. Mutual Funds registered with the Securities and Exchange Commission.
4. What are my Limits of Liability?
The limits of liability are either $1,000,000 each Claim/$1,000,000 aggregate or $1,000,000 each Claim/$2,000,000 aggregate (depending on which option you elected), which is the total amount that Zurich will pay (Loss and Defense Costs) for any one Claim.
The deductible schedule is:
- $500 per Claim for Midland and North American Products
- $2,500 per Claim for all other covered products
The deductible applies to Damages only.
6. What are some of the important conditions on policy coverage?
Claims Made and Reported
Coverage is on a "Claims Made and Reported"; basis, which covers claims first made against you and reported in writing to Zurich during the policy period.
Defense Obligations
The Insurer has a right and duty to defend any claim made against you within the terms of the policy. If a claim alleges dishonest, fraudulent or malicious acts, a defense will be provided if there are other covered allegations.
Please remember that your coverage under the policy could be jeopardized if you admit liability, agree to any settlement or incur any expense without the prior consent of Zurich.
Defense costs are included in the Limits of Liability.
Prior Acts Coverage
You are covered for claims regarding the sale and/or servicing of insurance products, mutual funds and variable products back to the earlier of: (1) your date of contract with Midland or North American; or (2) the inception date of your first continuously maintained claims made Agent or Registered Representative Professional Liability coverage.
7. What happens if my Agent’s contract is terminated with Midland or North American during the policy period?
If your contract is terminated during the policy period, coverage automatically ceases on the date your contract terminates.
However, a conditional automatic unlimited Extended Reporting Period (ERP) is provided at no cost to you. This will cover claims first made and reported during the ERP arising out of act, errors or omissions alleged or committed prior to the termination date of your contract with Midland or North American. This conditional automatic unlimited ERP is available as long as Zurich is the insurer on the E&O program. For more information about this ERP or other options, please contact Aon.
No ERP is available if you have other applicable insurance.