Would charge a $125 inspection fee plus a $125. policy fee – regardless of the need for an inspection! Just pocketed the inspection fee in a lot of cases, plus the policy fee. I quoted a small carpentry contractor’s CGL for a $500. min. premium. With taxes and fees, that minimum premium blossomed into almost $800. At least all the taxes and fees were spelled out on the quote and policy, if we managed to get an order with all those added charges. No wonder some retailers despise E&S wholesalers.
now see that anoys the hell out of me, you charge my client an inspection fee and then dont inspect. I have seen one or 2 wholesalers starting to not add the fee when they arent going to inspect, wich makes me favor them with more business!
most inspections fees on small E&S policies don’t actually cover the cost of an inspection.
an inspection may cost $300 – $400; and isn’t always conducted on every minimum premium policy. if it was, the cost to the insurer and the consumer would skyrocket.
thus, many binding-authority wholesalers apply a smaller blanket inspection fee to all accounts in that class, to cover the approximate costs of the inspections over the course of the year for that class of business.
the inspections are then selected randomly accross the class and book of business.
oh, and be grateful the wholesaler takes those $500 policies… they’re losing money on those. beleive me… none of them are going to cry if you take that business elsewhere.
agreed! I was talking to one of my ga’s who told be what there commision was. I asked “how do you make a profit?” the answer big volume is the only way.
To last employer….maybe what you fail to realize when discussing the “hated wholesaler” is that we generally write one or two polices for an overall account and work hard to arrange coverage but split the commission with the retail agent. The retail agent generally writes multiple policies for a client for which they are paid commission. Believe me wholesalers are not getting rich on policy fees. In the case of a MGA we do all the work, rating, policy issuance for generally 7.5 or 10% which, is peanuts on small accounts. Walk in our shoes before you cast stones!!
I hope they get real jail time. Maybe then the agents that scam the public will wake up and play by the rules. If you don’t feel you can make enough money legitmately and legally, get out of the profession. Stop victimizing your clients. Lawmakers, nail these criminals.
I don’t know why the AG is not seeking criminal penalties, but the IRS will certainly take an interest in this case. There could be severe financial penalties and the federal government can certainly ask for jail time for tax fraud. The government should make an example of this agency. The public will not stand for any more deception.
Two years ago William Gallagher Associates’ name was in the news for this same exact thing. Even the amount they bilked their clients out of was the same however they had the financial resources to come up with the restitution. These four will lose everything the Commonwealth of Mass can get their hands on and hopefully that includes their broker’s license. They do NOT belong in this industry.
Yup and the WGA perps walked away with licenses and designations intact giving them the ability to impress and “bilk” some more clients with their bottomless bottle of White-Out. By the time the AG is done this group of phonies won’t be teeing up at Tedesco anytime soon.
Why was the announcement of WGA’s wrongdoing released only after the closure of all investigation and penalty? If Kilgore is treated worse than WGA it will be a crime.
Unequal treatment? WGA admitted their wrong doing and quickly made restitution, sent out all the client letters and it was over and done with. Kilgore still doesn’t think they’ve done anything wrong what’s worse for their customers Kilgore has to cough up more $ than WGA. It was pocket change for WGA; it’s Kilgore’s lifestyle and then some.
The fraud in the Kilgore case was perpetrated by the agency owners/principals. White Out was all over their finger and knuckles for crying out loud! Additionally, Kilgore probably does not have the money or the means to raise $3,400,000 to make up for their illegal scheme never mind pay for the commonwealth and their attorney fees plus the fines Coakley’s office will impose. Is hindsight 20/20? You betcha!!!
idiots like this give the rest of us a bad name. Martha string them up by there balls!
Would charge a $125 inspection fee plus a $125. policy fee – regardless of the need for an inspection! Just pocketed the inspection fee in a lot of cases, plus the policy fee. I quoted a small carpentry contractor’s CGL for a $500. min. premium. With taxes and fees, that minimum premium blossomed into almost $800. At least all the taxes and fees were spelled out on the quote and policy, if we managed to get an order with all those added charges. No wonder some retailers despise E&S wholesalers.
now see that anoys the hell out of me, you charge my client an inspection fee and then dont inspect. I have seen one or 2 wholesalers starting to not add the fee when they arent going to inspect, wich makes me favor them with more business!
most inspections fees on small E&S policies don’t actually cover the cost of an inspection.
an inspection may cost $300 – $400; and isn’t always conducted on every minimum premium policy. if it was, the cost to the insurer and the consumer would skyrocket.
thus, many binding-authority wholesalers apply a smaller blanket inspection fee to all accounts in that class, to cover the approximate costs of the inspections over the course of the year for that class of business.
the inspections are then selected randomly accross the class and book of business.
oh, and be grateful the wholesaler takes those $500 policies… they’re losing money on those. beleive me… none of them are going to cry if you take that business elsewhere.
By the way, the agent being charged in this article is a retailer, not a wholesaler.
i’m aware, but responding to the complaints listed in the comments below.
agreed! I was talking to one of my ga’s who told be what there commision was. I asked “how do you make a profit?” the answer big volume is the only way.
again agreed! Learn to live with in the means of your profession!
To last employer….maybe what you fail to realize when discussing the “hated wholesaler” is that we generally write one or two polices for an overall account and work hard to arrange coverage but split the commission with the retail agent. The retail agent generally writes multiple policies for a client for which they are paid commission. Believe me wholesalers are not getting rich on policy fees. In the case of a MGA we do all the work, rating, policy issuance for generally 7.5 or 10% which, is peanuts on small accounts. Walk in our shoes before you cast stones!!
I hope they get real jail time. Maybe then the agents that scam the public will wake up and play by the rules. If you don’t feel you can make enough money legitmately and legally, get out of the profession. Stop victimizing your clients. Lawmakers, nail these criminals.
I don’t know why the AG is not seeking criminal penalties, but the IRS will certainly take an interest in this case. There could be severe financial penalties and the federal government can certainly ask for jail time for tax fraud. The government should make an example of this agency. The public will not stand for any more deception.
Two years ago William Gallagher Associates’ name was in the news for this same exact thing. Even the amount they bilked their clients out of was the same however they had the financial resources to come up with the restitution. These four will lose everything the Commonwealth of Mass can get their hands on and hopefully that includes their broker’s license. They do NOT belong in this industry.
Yup and the WGA perps walked away with licenses and designations intact giving them the ability to impress and “bilk” some more clients with their bottomless bottle of White-Out. By the time the AG is done this group of phonies won’t be teeing up at Tedesco anytime soon.
Three cheers for our AG. She didn’t stop:
WILLIAM GALLAGHER REVISITED PLUS
AFCO FINANCE’S PART
http://www.mass.gov/?pageID=cagopressrelease&L=1&L0=Home&sid=Cago&b=pressrelease&f=2009_08_25_afco_settlement&csid=Cago
AND CHUBB’S PART
http://www.badfaithinsurance.org/reference/General/0989a.htm
IS IT ANY WONDER WHY THE PUBLIC HATES US INSURANCE PEOPLE?
Actually Kilgore gets the award for having the larger restitution so go figure. Wonder if there are any posh golf courses at MCI Concord?
Why was the announcement of WGA’s wrongdoing released only after the closure of all investigation and penalty? If Kilgore is treated worse than WGA it will be a crime.
Unequal treatment? WGA admitted their wrong doing and quickly made restitution, sent out all the client letters and it was over and done with. Kilgore still doesn’t think they’ve done anything wrong what’s worse for their customers Kilgore has to cough up more $ than WGA. It was pocket change for WGA; it’s Kilgore’s lifestyle and then some.
The fraud in the Kilgore case was perpetrated by the agency owners/principals. White Out was all over their finger and knuckles for crying out loud! Additionally, Kilgore probably does not have the money or the means to raise $3,400,000 to make up for their illegal scheme never mind pay for the commonwealth and their attorney fees plus the fines Coakley’s office will impose. Is hindsight 20/20? You betcha!!!
Any outcome on this issue