The concept that agents only represent insurers – not the customer – is an obsolete premise.
The reality is that a person licensed by the state(s) is first responsible to the citizens of that state. That is the reason for licensing – to protect the consumer.
To allow a company, an insurer, to insist and require its agents to be loyal first to the company and only secondly to the consumer flies in the face of good public policy.
Yet, both insurance regulators and insurance legislators often claim they can’t interfere with contractual issues. Say what?
When contractual terms and company policy and actions towards its agents endanger the public weal, it most certainly is within the province of regulators and legislators – that’s what they are there for.
All this talk about conflict of interest and bid rigging totally ignores the ongoing problem of agents’ (mostly Independent -now that’s an oxymoron- contractors)businesses being held hostage to the demands of their companies to produce certain types of business.
To make matters worse, this huge segment of the producer world is mostly voiceless. Regulators and legislators almost never hear from these agents. Why?
Insurers make certain that should a “captive” agent ever testify before a regulatory agency and/or a legislative committee in a manner that is not supportive of the insurer’s agenda, they will lose their lifelong investment: their business.
Oh, but of course to remedy this situation, these “defenders of the public good” would have get into contractual issues. May the gods forfend!
Having worked in both company and brokerage positions: giving override commissions for production incentives on the one hand; and later having been short-changed out of my share of bonus-commissions paid to “the house” annually:
Having given quotes to brokers which never were presented:
And having blocked markets to assure that control was maintained:
I can firmly come down on both sides of the fence,
and confidently assert that the “system” needs reform:
as it currently does not address the client’s needs first,
but primarily is driven by the pecuniary interests
of brokers & companies.
Regulation? How about a code of ethics, the violation
of which gets you penalized..???
1. Any remuneration is identified clearly.
2. All markets approached are listed.
3. All market quotes are presented.
I’m sure there are more “ethical imperatives”
which should be iterated:
Maybe somebody ought to look at the different sets of books carriers keep, one for the stockholders for executive compensation (million dollar raises), one for the brokers to set commissions (lower them again), and another set for the insurance commissioner to show how much they need to raise premiums.
The concept that agents only represent insurers – not the customer – is an obsolete premise.
The reality is that a person licensed by the state(s) is first responsible to the citizens of that state. That is the reason for licensing – to protect the consumer.
To allow a company, an insurer, to insist and require its agents to be loyal first to the company and only secondly to the consumer flies in the face of good public policy.
Yet, both insurance regulators and insurance legislators often claim they can’t interfere with contractual issues. Say what?
When contractual terms and company policy and actions towards its agents endanger the public weal, it most certainly is within the province of regulators and legislators – that’s what they are there for.
All this talk about conflict of interest and bid rigging totally ignores the ongoing problem of agents’ (mostly Independent -now that’s an oxymoron- contractors)businesses being held hostage to the demands of their companies to produce certain types of business.
To make matters worse, this huge segment of the producer world is mostly voiceless. Regulators and legislators almost never hear from these agents. Why?
Insurers make certain that should a “captive” agent ever testify before a regulatory agency and/or a legislative committee in a manner that is not supportive of the insurer’s agenda, they will lose their lifelong investment: their business.
Oh, but of course to remedy this situation, these “defenders of the public good” would have get into contractual issues. May the gods forfend!
Having worked in both company and brokerage positions: giving override commissions for production incentives on the one hand; and later having been short-changed out of my share of bonus-commissions paid to “the house” annually:
Having given quotes to brokers which never were presented:
And having blocked markets to assure that control was maintained:
I can firmly come down on both sides of the fence,
and confidently assert that the “system” needs reform:
as it currently does not address the client’s needs first,
but primarily is driven by the pecuniary interests
of brokers & companies.
Regulation? How about a code of ethics, the violation
of which gets you penalized..???
1. Any remuneration is identified clearly.
2. All markets approached are listed.
3. All market quotes are presented.
I’m sure there are more “ethical imperatives”
which should be iterated:
those would be a good start.
Maybe somebody ought to look at the different sets of books carriers keep, one for the stockholders for executive compensation (million dollar raises), one for the brokers to set commissions (lower them again), and another set for the insurance commissioner to show how much they need to raise premiums.