One of the biggest advantages the State Fund has is its low expenses if I recall correctly from their financials. Paying a commission could cost them a lot of agents start poaching their direct business. If they pay competitive commissions, it can’t be good for the fund’s long term viability.
While commissions obviously play a part in driving costs, this is not the case for State Fund. State Fund is usually the absolute highest in premiums, and normally by a rather large margin. This fund is the place for business that essentially cannot be located elsewhere, due to nearly all carriers having a distaste for the clientele (either an industry with high incidences, or individual clients with histories of bad/frequent losses). So, while I agree paying no commissions can be a part in keeping rtes lower, I do not agree this is a major issue with the State Fund. Due to their pricing, no client would ever want to be with the Fund, unless required to do so. Their pricing is already so out of whack with the rest of the market.
As bad as you think the Calif State Fund’s treatment of brokers is, there is none worse than the NY State Fund which doesn’t pay ANY commission ever and doesn’t recognize licensed brokers at all. In NYS we do all their work and are just listed as representatives. I’ll take your system any day over New York’s
One of the biggest advantages the State Fund has is its low expenses if I recall correctly from their financials. Paying a commission could cost them a lot of agents start poaching their direct business. If they pay competitive commissions, it can’t be good for the fund’s long term viability.
While commissions obviously play a part in driving costs, this is not the case for State Fund. State Fund is usually the absolute highest in premiums, and normally by a rather large margin. This fund is the place for business that essentially cannot be located elsewhere, due to nearly all carriers having a distaste for the clientele (either an industry with high incidences, or individual clients with histories of bad/frequent losses). So, while I agree paying no commissions can be a part in keeping rtes lower, I do not agree this is a major issue with the State Fund. Due to their pricing, no client would ever want to be with the Fund, unless required to do so. Their pricing is already so out of whack with the rest of the market.
As bad as you think the Calif State Fund’s treatment of brokers is, there is none worse than the NY State Fund which doesn’t pay ANY commission ever and doesn’t recognize licensed brokers at all. In NYS we do all their work and are just listed as representatives. I’ll take your system any day over New York’s