Inherited Book of Business

[socalnewbie]

My mother has been in commerical insurance her whole life and she recently passed away. Her book of business was left to my sister and I. As we understand it, the book of business is worth $1MM/year. The company she worked for has to buy the book of business from us. With neither of us being from the insurance world, and my mother's reluctance to sign a contract detailing how the business would be bought, I am seeking advice or any knowledge you can share on how books of business are bought and what is considered when the agency buys the business. Also, the agency has confirmed that they have renewed all her business for this year.

Thank you for any information or help you can provide!

[Rainmaker]

First let me offer condolences for your recent loss.

You need an intermediary. Like Hales Group or Marsh-Berry. Third party valuation of the book, earn out or cash up front, how is lost business during the earn out handled, will cross sold or account rounding business be added to the earn out.

Lot's of moving parts to these. My first question would be how they came up with the valuation. My second would be to get a clear picture of how their proposed buy out structure will impact tax issues.

Cheers

[jctwindad]

Suggest you retain a good consultant. I recommend Chris Burand, in Pueblo, CO. His email is chris@burand-associates.com. He has experience in this area.

Stephen Bryant