NAAA Concludes Board Meeting at AIAT

November 13, 2001

The National Auto Agents Alliance (NAAA) held its third Board Meeting of the year in Arlington, Texas, on Nov. 2. For the fourth consecutive year, the meeting was held in conjunction with the Automobile Insurance Agents of Texas (AIAT) Annual Conference and Trade Fair.

The Board approved a number of items at the Board Meeting. Among the items were the following:

The Independent Brokers Network’s (IBN) application for affiliation with NAAA was officially approved. As a result of the affiliation of the Latin American Agents Association (LAAA) and IBN, membership from California has replaced membership lost from the withdrawal of the American Agents Alliance. This double affiliation provides NAAA not only presence in Southern California but significant presence in Northern California where agents had been largely ignored.

American Equity was approved as the new carrier for the NAAA sponsored E&O program. At mid-year, the former carrier ACE American withdrew from the E&O marketplace.

The Board approved a model agency contract subject to final review. A carrier that is considering revisions in their current contract is considering the NAAA model contract and the model contract will soon be available to members for comparing their current contracts. NAAA will also work with companies to make their current contracts more agent-friendly, in line with the model contract.

A report on the status of company commission cutting was presented. Several companies have been contacted and their responses were reported and the board also clarified its position on what company commission actions that it is pursuing. The NAAA will aggressively pursue companies that cut renewal commissions on in-force books of business.

While the NAAA does not in general approve of reductions in commissions, it understands however that both agents and companies may agree to place future business at a mutually agreed upon commission. The slashing of renewal compensation far beyond the minimum level necessary to provide the services for which consumers contracted is however unacceptable, NAAA believes. NAAA agent members were contracted to provide ongoing quality local services for policyholders. In some instances, companies have cut commissions as low as 1 percent. This is well below the level required for an agent to provide service to the inforce customer book. The NAAA will aggressively pursue actions against companies that have cut renewal commissions on existing, in-force business.

The next meeting of the NAAA will be in Las Vegas on Feb. 8-9, 2002. The second meeting of 2002 will be in Los Angeles in conjunction with the Latin American Agents Association meeting in May.

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