The premise that the agents of companies like State Farm, Farmers and Allstate are Independent Contractors is hogwash.
The controls, including quotas, that are imposed on the agents prevent them from being anything but employees without benefits.
Those controls reach right down into the agents’ staffs.
These companies want all the control that applies to employees without the responsibilities and benefits that come with that.
In addtion, they want to be able to terminate the contract with or without cause.
A small business owner invests an incredible amount of time and money into his/her business. The concept that the business can be destroyed for any reason or no reason is beyond the pale.
All other things being equal, a computer programmer, a machinist or a legal secretary, if terminated, can get another job across town.
For 23 years Nationwide has tried to play both sides of the fence. They want total control of your business life even it it don’t involve them. I’m in a simuilar issue with them at present. I’m glade to see that Alex won one for all of us! I hope the Cout of Appeals don’t over turn his verdict.
About time juries wake up around the country. If someone got fired from any other business and wasn’t given a reason, they’d be sued like crazy, and lose! Why should insurance companies be any differant? Their contracts should be illegal.
Finally after all my years in this business some of my pet peeves are being addressed. I always wondered why insurance companies adhesion contracts were never tested. Insurance company contracts are so one sided that they can barely muster the legality under contract law. We work in their “take it or leave it” contract world.
I’ve always considered that the adversarial arrangements between insurance companies and agents did not need to exist. It existed because the companies could get away with it. Perhaps this will be the test case that brings agents out of the slave like existence of adhesion contracts.
About 10 years ago I had a PPGA contract with a life company. Said company decided to go to an MGA distribution model and at will cancelled all PPGA contracts. Because my contract was terminated I started getting a charge on each client for the company cost of billing the clients. Even tough all clients were direct bill before the termination, after termination by contract the insurance company had to bill the clients….I had to pay for their billing process. Yep…..lesson learned on that one!
Just an fyi, the statement that you can’t terminate someone without giving them a reason is not true…if you are in an “at will” employment state, you can let someone go without giving them any reason at all. They, of course, can still try to sue for wrongful termination but would have to prove you terminated them for some discriminatory reason such as age or race.
If agents can’t ever be fired, what is to keep insurance companies from preventing rouge agents from handing out discounts as they please? Or from sending in legal documents as required by law. Besides preventing agencies from writing policies without proof for EVERYTHING before they bind business. I am not saying all agents will cheat, but if companies are not able to remove the trash, discounts will not be actuarially justified and removed from rating plans. It would be a subsidy nighmare. Maybe Alex deserved his settlement. I would contend this be the exception, not the rule.
That would be fine if you are an employee and have a choice to be hired and fired. A contractor that signs a contract that stipulates they can be fired at will probably is a different animal. I have no glasses on sorry for any typos.
Not a single witness in the case identified a single law or company policy Charts had violated. Company managers had removed business from Charts computer account without permission of the agent or clients and been reprimaded for it. Nationwide made every argument it made in the article to the jury and they obviously rejected them.
There’s nothing wrong with contracts having moral clauses, breach of contract for illegal activities, etc. Such items were not an actionable cause but what was being judged was the willful termination clause. The franchise agencies are even at greater risk than independents because with the stroke of a pen, they can lose their entire book.
HOORAY! It is about time that the Ins Co.s had to treat their agents fairly. Who knows, their insureds may be next.
I suspect that besides being made a scape goat, there were pension issues which they wanted to take from the agent, and that the agent was “making too much money” and wouldn’t lick the appropriate boots.
I hope the plaintif gets triple damages.
Justice has been served, and the insurance companys smoke screen has been seen through!!!
Sefton, your comment is very interesting to me. I would like to know more about the computer accounts and the managers being reprimanded.
“Company managers had removed business from Charts computer account without permission of the agent or clients and been reprimanded for it.”
Please contact me at Lthyroff@aol.com or my cell at 585-202-9938
I was terminated on Sept 19, 2000. I was never told the reason for my termination although Nationwide managers told agents that I had committed a serious SEC violation.
Nationwide told the NASD about this a ledge “violation” and requested that they investigate. Six months later after the start of an exhausting NASD investigation, I received a “Letter of Caution” from the NASD. I received no termination no suspension and or fine.
I had eight employees and was in the top percentage for company profitability.
I started a “scratch” agency at age 26 in 1979 in Upstate NY. I had received almost every award an agent can receive including Presidents, Champion, CLC and 18 straight years as an Honor agent. I had 8600 policies in force. I never missed a loss ratio, growth and or persistency bonus. My last five year loss ratio was 46% for all lines. My persistency was 94 & 96% auto home. My bonus was $58,000 for 1999. Commission in excess of $500,000.
This is why I am interested in your comment…
On Sept 18, 2000 Nationwide’s “new” manager called my office and requested that I attend a meeting the next day in Syracuse NY at 9:00am. She would not tell me the reason for the meeting. I left my home at 7:00am on 9-19-00 arrived at 8:45am. At my arrival, my staff called my cell phone to tell me that something is going wrong with the computers, “something they never seen.” Unfortunately I did not answer their call. If I had I would have told them to pull the phone line from the jack thus stopping the upload. Nationwide uploaded all of the data and turned my computers useless in less than twenty five minutes. I lost everything. I had no hard copies and any form of backup other than tape backup that could be read only by the computer I lease from Nationwide Computer Services. Nationwide refused to give me my data, information and all my personal software. NATIONWIDE STOLE MY INFORMATION.
I was forced to retire. I had almost $700,000 in ASCP and Nationwide refused to pay me my ASCP stating I was competing. After four plus years October 16, 2004 a Federal Judge awarded me Summary Judgment against Nationwide for breach of contract.
After four years and spending well over hundred thousand dollars in legal fees, I just begun to receive my money.
Anyone who has information that could help me fight back for my stolen information would be helpful.
So where was the agents’ advocate? When will the agents/producers wake up to the fact that we need an advocate to protect our rights against the big insurance giants? Are the agencies, agents, and producers willing to pay someone to represent them on an onging (annual) basis to protect their rights against the unilateral and often unfounded dictates of the insurance carrier/s they represent? If so, let me know by calling toll free (1-877-447-1400) and ask for Rupe. The greater the response, the greater the possibility of having an agency/agent/ producer advocate on our side. Please let me hear from you. There are ways to protect ourselves as agencies/agents/ producers. When you call, ask for Rupe, the agent advocate.
Many years ago, a life insurance company notified their agents that a certain policy was being withdrawn in 10 days. The reason given was the policies actuarial assumptions were incorrect. I was one of the leading producers for this carrier and in one week’s time I presented the carrier with 62 whole life policies-all with annual premiums paid with the applications. All the applicants were attorneys who I had represented. I turned the apps into the company prior to the pull date. I then received a call from the President of the company rejecting all the applications on the premise that the Company was trying to get out of writing this specific contract. I told him that I adhered to all the requirements. He said I will have all the applications returned in the morning. After telling him,to no avail, that he left me no choice but to file my first ever complaint to the insurance department, he returned all the applications the following morning and I filed a complaint on behalf of my clients. Within a week, I received a call from the carrier, that reluctantly they will process the applications, but would not send any compensation to me for these contracts. I again filed a complaint and all 62 applicants were approved and commission was received. The following week, I received a letter from the carrier terminating my contract . I was more than happy to accept their termination under the circumstances. Six months later they were pounding down my doors for business and wanted to reinstate my contract. I refused. I have not done any business with this carrier since. This is only one situation that shows the lack of respect that carriers have for their representatives.
you know its also funny how many companies will title one as being an “independant agent” but when recruiter IE, PPGA,GA,IMO to a certain company gets terminated then everyone under that hierarchy also gets terminated for no cause. thus creating an instant sometimes quite large debit balance that other wise maybe handled with additional business and renewals. Thus locking one out of doing business with them to settle. And at the same time reporting to VECTOR ONE and thwarting any chances of appointment with other companies to keep revenues coming in to pay for it.
glad to see it.
The premise that the agents of companies like State Farm, Farmers and Allstate are Independent Contractors is hogwash.
The controls, including quotas, that are imposed on the agents prevent them from being anything but employees without benefits.
Those controls reach right down into the agents’ staffs.
These companies want all the control that applies to employees without the responsibilities and benefits that come with that.
In addtion, they want to be able to terminate the contract with or without cause.
A small business owner invests an incredible amount of time and money into his/her business. The concept that the business can be destroyed for any reason or no reason is beyond the pale.
All other things being equal, a computer programmer, a machinist or a legal secretary, if terminated, can get another job across town.
Talk about having your cake and eating it too!
For 23 years Nationwide has tried to play both sides of the fence. They want total control of your business life even it it don’t involve them. I’m in a simuilar issue with them at present. I’m glade to see that Alex won one for all of us! I hope the Cout of Appeals don’t over turn his verdict.
About time juries wake up around the country. If someone got fired from any other business and wasn’t given a reason, they’d be sued like crazy, and lose! Why should insurance companies be any differant? Their contracts should be illegal.
Finally after all my years in this business some of my pet peeves are being addressed. I always wondered why insurance companies adhesion contracts were never tested. Insurance company contracts are so one sided that they can barely muster the legality under contract law. We work in their “take it or leave it” contract world.
I’ve always considered that the adversarial arrangements between insurance companies and agents did not need to exist. It existed because the companies could get away with it. Perhaps this will be the test case that brings agents out of the slave like existence of adhesion contracts.
About 10 years ago I had a PPGA contract with a life company. Said company decided to go to an MGA distribution model and at will cancelled all PPGA contracts. Because my contract was terminated I started getting a charge on each client for the company cost of billing the clients. Even tough all clients were direct bill before the termination, after termination by contract the insurance company had to bill the clients….I had to pay for their billing process. Yep…..lesson learned on that one!
Just an fyi, the statement that you can’t terminate someone without giving them a reason is not true…if you are in an “at will” employment state, you can let someone go without giving them any reason at all. They, of course, can still try to sue for wrongful termination but would have to prove you terminated them for some discriminatory reason such as age or race.
If agents can’t ever be fired, what is to keep insurance companies from preventing rouge agents from handing out discounts as they please? Or from sending in legal documents as required by law. Besides preventing agencies from writing policies without proof for EVERYTHING before they bind business. I am not saying all agents will cheat, but if companies are not able to remove the trash, discounts will not be actuarially justified and removed from rating plans. It would be a subsidy nighmare. Maybe Alex deserved his settlement. I would contend this be the exception, not the rule.
That would be fine if you are an employee and have a choice to be hired and fired. A contractor that signs a contract that stipulates they can be fired at will probably is a different animal. I have no glasses on sorry for any typos.
Not a single witness in the case identified a single law or company policy Charts had violated. Company managers had removed business from Charts computer account without permission of the agent or clients and been reprimaded for it. Nationwide made every argument it made in the article to the jury and they obviously rejected them.
There’s nothing wrong with contracts having moral clauses, breach of contract for illegal activities, etc. Such items were not an actionable cause but what was being judged was the willful termination clause. The franchise agencies are even at greater risk than independents because with the stroke of a pen, they can lose their entire book.
HOORAY! It is about time that the Ins Co.s had to treat their agents fairly. Who knows, their insureds may be next.
I suspect that besides being made a scape goat, there were pension issues which they wanted to take from the agent, and that the agent was “making too much money” and wouldn’t lick the appropriate boots.
I hope the plaintif gets triple damages.
Justice has been served, and the insurance companys smoke screen has been seen through!!!
Good for Alex….more to come.
Sefton, your comment is very interesting to me. I would like to know more about the computer accounts and the managers being reprimanded.
“Company managers had removed business from Charts computer account without permission of the agent or clients and been reprimanded for it.”
Please contact me at Lthyroff@aol.com or my cell at 585-202-9938
I was terminated on Sept 19, 2000. I was never told the reason for my termination although Nationwide managers told agents that I had committed a serious SEC violation.
Nationwide told the NASD about this a ledge “violation” and requested that they investigate. Six months later after the start of an exhausting NASD investigation, I received a “Letter of Caution” from the NASD. I received no termination no suspension and or fine.
I had eight employees and was in the top percentage for company profitability.
I started a “scratch” agency at age 26 in 1979 in Upstate NY. I had received almost every award an agent can receive including Presidents, Champion, CLC and 18 straight years as an Honor agent. I had 8600 policies in force. I never missed a loss ratio, growth and or persistency bonus. My last five year loss ratio was 46% for all lines. My persistency was 94 & 96% auto home. My bonus was $58,000 for 1999. Commission in excess of $500,000.
This is why I am interested in your comment…
On Sept 18, 2000 Nationwide’s “new” manager called my office and requested that I attend a meeting the next day in Syracuse NY at 9:00am. She would not tell me the reason for the meeting. I left my home at 7:00am on 9-19-00 arrived at 8:45am. At my arrival, my staff called my cell phone to tell me that something is going wrong with the computers, “something they never seen.” Unfortunately I did not answer their call. If I had I would have told them to pull the phone line from the jack thus stopping the upload. Nationwide uploaded all of the data and turned my computers useless in less than twenty five minutes. I lost everything. I had no hard copies and any form of backup other than tape backup that could be read only by the computer I lease from Nationwide Computer Services. Nationwide refused to give me my data, information and all my personal software. NATIONWIDE STOLE MY INFORMATION.
I was forced to retire. I had almost $700,000 in ASCP and Nationwide refused to pay me my ASCP stating I was competing. After four plus years October 16, 2004 a Federal Judge awarded me Summary Judgment against Nationwide for breach of contract.
After four years and spending well over hundred thousand dollars in legal fees, I just begun to receive my money.
Anyone who has information that could help me fight back for my stolen information would be helpful.
Thanks Lou Thyroff
Lthyroff@aol.com
585-202-9938
So where was the agents’ advocate? When will the agents/producers wake up to the fact that we need an advocate to protect our rights against the big insurance giants? Are the agencies, agents, and producers willing to pay someone to represent them on an onging (annual) basis to protect their rights against the unilateral and often unfounded dictates of the insurance carrier/s they represent? If so, let me know by calling toll free (1-877-447-1400) and ask for Rupe. The greater the response, the greater the possibility of having an agency/agent/ producer advocate on our side. Please let me hear from you. There are ways to protect ourselves as agencies/agents/ producers. When you call, ask for Rupe, the agent advocate.
Many years ago, a life insurance company notified their agents that a certain policy was being withdrawn in 10 days. The reason given was the policies actuarial assumptions were incorrect. I was one of the leading producers for this carrier and in one week’s time I presented the carrier with 62 whole life policies-all with annual premiums paid with the applications. All the applicants were attorneys who I had represented. I turned the apps into the company prior to the pull date. I then received a call from the President of the company rejecting all the applications on the premise that the Company was trying to get out of writing this specific contract. I told him that I adhered to all the requirements. He said I will have all the applications returned in the morning. After telling him,to no avail, that he left me no choice but to file my first ever complaint to the insurance department, he returned all the applications the following morning and I filed a complaint on behalf of my clients. Within a week, I received a call from the carrier, that reluctantly they will process the applications, but would not send any compensation to me for these contracts. I again filed a complaint and all 62 applicants were approved and commission was received. The following week, I received a letter from the carrier terminating my contract . I was more than happy to accept their termination under the circumstances. Six months later they were pounding down my doors for business and wanted to reinstate my contract. I refused. I have not done any business with this carrier since. This is only one situation that shows the lack of respect that carriers have for their representatives.
you know its also funny how many companies will title one as being an “independant agent” but when recruiter IE, PPGA,GA,IMO to a certain company gets terminated then everyone under that hierarchy also gets terminated for no cause. thus creating an instant sometimes quite large debit balance that other wise maybe handled with additional business and renewals. Thus locking one out of doing business with them to settle. And at the same time reporting to VECTOR ONE and thwarting any chances of appointment with other companies to keep revenues coming in to pay for it.