Posted On: July 3, 2007, 4:52 pm CDT

Posted By: dan

ok i have to admit, i'm a little lost when it comes to what exactly the situation here is, but as i understand it the rims is upset about an agency receiving a bonus for having a profitable book of business with a carrier, or even a growth bonus for placing business there. now of all the subjects they could go after, why pick that one? Something that is rampant through out the independent agent / broker community is the use of "service fees" or "inspection fees" these are bs fees charged to the client by the agent. I have personally seen policies where a person who would have been charged a minor amount say $1500 is charged $2500 and the agent pockets the extra $1000. Don't get me wrong according to illinois state law it's legal to do if the insured signs a letter saying he knows about it, but you know the game, insureds don't know what it is, they're told they have to sign this, the wording is difficult to understand, and the policy declarations page is doctored to reflect the fee as if it was there all along. they're being fleeced by unscrupulous agents. Now that's a subject to stick your teeth into, that's something to go after getting eliminated, not every agent does this, and as far as i can tell no captive agent does, it's strictly in the independent channel, it's immoral, and almost undefensable. That alone could help to clean up a rotten industry. Another subject i would like to see gone after is actually holding agents responsible, and i mean personally finacially responsible, when the intentionally provide misinformation to an insurance carrier to get a different price than the one they should be getting. an example of this would be writing a grocery store as a produce dealer, the produce dealer pays almost nothing, but the grocery store contemplates other exposures and pays more. another one would be misrepresenting the scope of the business, for instance the insured tells you that their annual sales are $500,000 and you tell the company $100,000 to get a lower price, i feel if you want to clean up this industry the agent should be held finacially responsible for the difference in price at audit time, not the insured. this forces the agent, who would not be able to charge fees, to be open and honest with the carriers to avoid getting bit upon audit. the problem as i see it is not that agents are paid a bonus for writing "quality" business, i.e. business with no claims, the problem is agents who fleece the consumer and misrepresent them to the insurance carriers, that's a target to go after