Agents Take Aim at Zurich Compensation, Disclosure Settlement
National News • September 20, 2006
An association for independent insurance agents has urged a federal court to reject recent settlement provisions between Zurich Insurance and states that affect thousands of agents who were not ...
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Subject: RE: contingent commissions
Posted On: September 21, 2006, 1:02 pm CDT
Posted By: Good For PIA
Comment:
Go PIA !!, it is about time someone challenged the lunacy of these agreements that have no teeth, but make a lot of noise. It has to stop, and maybe now that the AG's have begun to soften on Willis, Marsh and Aon.. they will listen to PIA and respect the value of the local agents who employ millions and keep business in their local communities. These local agents have to face their clients everyday at church or the local chamber. That is their motivation for good service, not a few points.
In every industry better performers earn accordingly. Commissions and other costs are part of the filing each carrier does, it does not matter if it is called profit sharing, commission or incentives.
What is illegal is bid rigging, always has been. This is difficult on "automated" lines of business like personal lines, and small commercial. This is the reason most "bad" things happened in the excess casualty arena. How many pizza shops negotiate on "specs" to buy a 40 million dollar umbrella ? Bad people will be bad, a disclosure form will not stop a bad guy, only make them lie a little more. Why make the pizza shop have to sign one, or the local homeowner who needs binder today for closing ?
The brief does a good job questioning how you can have an entire segment (the small agent) be persecuted for what a few large agents did. These smaller agents did not have the same incentives, or opportunity.
PIA is on the mark here, and good for them. It is not good for the business to make the average consumer jump through yet more hoops to buy insurance from an agent is just not fair to the agents or consumers. The system actually works pretty well. When I hear people say we need transparency I know they don't know the issues. Local Agents are already the most transparent group, just ask their clients who have their home numbers, know where they live and their wives first names.
At the end of the day consumers can care less if you receive a few extra points, they care what the overall premium and service is and that is how they make their buying decisions.
AG's really should spend more time enforcing existing regulations, this where the focus needs to be.
Subject: RE: contingent commissions
In every industry better performers earn accordingly. Commissions and other costs are part of the filing each carrier does, it does not matter if it is called profit sharing, commission or incentives.
What is illegal is bid rigging, always has been. This is difficult on "automated" lines of business like personal lines, and small commercial. This is the reason most "bad" things happened in the excess casualty arena. How many pizza shops negotiate on "specs" to buy a 40 million dollar umbrella ? Bad people will be bad, a disclosure form will not stop a bad guy, only make them lie a little more. Why make the pizza shop have to sign one, or the local homeowner who needs binder today for closing ?
The brief does a good job questioning how you can have an entire segment (the small agent) be persecuted for what a few large agents did. These smaller agents did not have the same incentives, or opportunity.
PIA is on the mark here, and good for them. It is not good for the business to make the average consumer jump through yet more hoops to buy insurance from an agent is just not fair to the agents or consumers. The system actually works pretty well. When I hear people say we need transparency I know they don't know the issues. Local Agents are already the most transparent group, just ask their clients who have their home numbers, know where they live and their wives first names.
At the end of the day consumers can care less if you receive a few extra points, they care what the overall premium and service is and that is how they make their buying decisions.
AG's really should spend more time enforcing existing regulations, this where the focus needs to be.