Posted On: November 5, 2004, 4:09 pm CST

Posted By: Jay Schrader, CPCU

It's hard to imagine Insurance agencies just accepting the loss of a large percentage on their net income. As we all know Companies have been lowering commissions steadily over the last 15 years. Profit Sharing agreements for alot of Main Street sized agencies are the difference between making a profit or not. If these contracts become "illegal" then the agencies will be encouraged to not always offer their customers the lowest price but to offer the company with the highest up-front commission or add on "brokerage fees" just to financially survive. Then the companies will adjust to the new rules and get in a bidding war based on up-front commissions instead of commissions plus profit sharing. I don't think the savings will be passed on to the consumers-- it will just be readjusted to comply with what ever new laws are enacted.