[This page for internal SCS use only] Instructions for Preparing the Sample Customer Acknowledgment Letter for Governmental Entities Any compensation to producers for the business of a governmental entity such as city, county, state or public school district that is not specified in the customer’s request for proposals or bid specifications must be approved by the SCS Company Chief Financial Officer and the SCS Legal Department. After all appropriate approvals are received, the following template must be used to obtain customer acknowledgment of the compensation. This template will evidence the acknowledgment and approval of payment of compensation to a producer for obtaining business with a governmental entity. It must be modified to list all of the compensation to be paid to the producer in detail. After the letter is drafted for the customer’s signature, it should be reviewed and approved by your legal representative. The original letter should be maintained in the SCS Company’s customer file and a copy should be sent to your legal representative. Please remember that no compensation can be paid for any governmental entity account if the producer is receiving compensation directly from the customer, or otherwise acting as the customer’s consultant.
This acknowledgment must be on the Governmental Entity’s letterhead and signed by an authorized representative.
[ customer letterhead ]
Dear [SCS Company]: [Producer name] (Producer) [has performed and] will [continue to] perform certain services for [SCS Company] in connection with the [Governmental Entity’s Name]’s obtaining its insurance coverage and the ongoing servicing of such coverage. Upon receipt of the written approval of the authorized representative of the [Governmental Entity’s Name], [SCS Company] will pay Producer [describe compensation in very specific terms, for example 1% or premium per month, or $5.00 per enrolled employee per month, etc] for servicing the account. The cost of this compensation [is] [is not] directly included in the [health insurance premiums] [administrative service fees] paid by [Governmental Entity’s Name]. [These payments will be the only compensation paid to Producer by [SCS Company] for servicing the [Governmental Entity’s Name] account. . [Or Alternatively: In addition to these payments, Producer will be eligible for participation in bonus programs made available by [SCS Company] from time to time.] As the authorized representative and on behalf of the [Governmental Entity’s Name], (1) I acknowledge that [Governmental Entity’s Name] has had the opportunity to discuss with Producer and a representative of [SCS Company] all facts and circumstances relating to the compensation described above, (2) [Governmental Entity’s Name] understands, accepts and approves of payment of this compensation to Producer by [SCS Company] and (3) [Governmental Entity’s Name] represents to [SCS Company] that Producer did not receive compensation directly from [Governmental Entity’s Name], and Producer did not act as a consultant to, or representative of, [Governmental Entity’s Name] with respect to its procurement of health insurance coverage by [SCS Company], nor will Producer act as a consultant to, or representative of, or receive any compensation directly from [Governmental Entity’s Name] at any time during which the compensation described above is paid to Producer. Sincerely,
[Must be signed by an executive or officer who has authority to sign legal documents for the Governmental Entity]