It is somewhat of a sad day when the only recourse an agent has is to sue for his rights. I was put in that position by a company over twenty years ago and I also won in court.( The carrier asked for an out of court settlement with a Gag order, but I refused the Gag Order.) In an industry where everything is based on a relationship it seems that the carriers are not playing with a full deck as more and more of them are trying to go direct sales over the internet and compete with thier own agents who are left with a disadvantaged price with the customer. It would be a whole lot nicer world if everyone just remembered that we all do better when we work together for the better good of our customers. Are there any companies out there anymore that believe in that principle? I hope so…..
I have had to fight several carriers regarding this same issue, when as an MGA our agency’s productions due to the hard market classification terminations fell we lost two carrier contracts.
In Washington to issue a non-renewal notice based upon “Agent no longer represents this carrier” isnt a legal reason. And the carrier has to give your agency 12 months after contract termination to replace the business. They also can not give your business to another appointed agent. Not without paying you the commission that placement would have generated for your agency.
Unfortuantly a few of our peers that also lost their contracts didnt research the RCW or WAC and sent notices out when they were told to. Causing the loss of thousands of premium dollars along with devistating damage to their reputations.
Moral of the story…dont let any carrier tell you what you can or can not do…research the law in your state. And hold the carrier accountable.
Good point JLT. I find it hard to believe that Eppinger “didn’t care which way it went”.
The only issue I have is that the reason for termination needs to be defined and this could create a different method for handling the existing book. If the agent or broker did something unethical or didn’t retain the required legal forms (this would put the company in extreme jeapordy), then I believe it’s in the company’s best interest to non-renew the business asap. On the other hand, if it’s a production issue, the cutomers shouldn’t be put in a position to re-shop for insurance just because the company and the agent had a different set of objectives.
Interesting when an agent is not concerned about their clients but about their book of business. I’ve seen them balk over these non-renewals when the company is having financial difficulties and can’t keep writing the business. And apparently, the contract becomes meaningless, unless you can terminate immediately with the agent and continue his book of business under contract terms for as long as the law requires. Makes it very difficult to end a relationships with a troublesome agent. As you can see, I’ve worked the company side. But mostly, I think it’s regrettable that the customer gets the squeeze play between two warring factions.
I agree with the ethics issue. No carrier should be stuck due to an agents misrepresentation or financial instability however…this isnt the job of the carrier to police this agents actions.
That is what the Insurance Commisioner’s Office is paid to do. I have seen enought displinary actions to know that when a carrier reports these unethical agents they usually act very quickly to seize the offending agent by the scruff of the neck to prevent any possible harm to the consumer.
From an ethical standpoint it is our job at any level, Wholesaler, MGA or retailer to protect our consumers from a carrier’s whim. Isnt that why we all get paid the big bucks ;o)
Our company is committed to the agency system for distribution. I am surprised that an agent would have to go to court to fight for what was his in the first place, the book of business that he built. I read all kinds of horror stories in Insurance Journal about some of the big, national carriers; apparently they get too big and forget who it was that helped make them that way…we are NOT going to direct writing and it is easy to compete with the direct writers because we rely on hometown agents who still actually know their clients. As for this run off, this sounds like the company and agent had a very bad divorce…
I have experience with one company that terminated 5 agencies on the same day withoutgiving good reasons. It turned out that the real reason was that they all had sizable books of personal lines on Long Island where the company perceived a coastal axposure problem. This was the company’s way of getting around state laws. All 5 agencies have lost a ton of that business and the company go its way.
How sorry is it when a company that uses the independent agency system as their main means for distributing business, they turn around and make the agent fight tooth and nail, THEN appeal the decision, just so precedented history can go on. Is this a company you want to represent?
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as the reason for non renewal…no longer writing with this broker…?
That’s pretty much it. Our usual notice indcates that…
This agent no longer represents…
It is somewhat of a sad day when the only recourse an agent has is to sue for his rights. I was put in that position by a company over twenty years ago and I also won in court.( The carrier asked for an out of court settlement with a Gag order, but I refused the Gag Order.) In an industry where everything is based on a relationship it seems that the carriers are not playing with a full deck as more and more of them are trying to go direct sales over the internet and compete with thier own agents who are left with a disadvantaged price with the customer. It would be a whole lot nicer world if everyone just remembered that we all do better when we work together for the better good of our customers. Are there any companies out there anymore that believe in that principle? I hope so…..
I have had to fight several carriers regarding this same issue, when as an MGA our agency’s productions due to the hard market classification terminations fell we lost two carrier contracts.
In Washington to issue a non-renewal notice based upon “Agent no longer represents this carrier” isnt a legal reason. And the carrier has to give your agency 12 months after contract termination to replace the business. They also can not give your business to another appointed agent. Not without paying you the commission that placement would have generated for your agency.
Unfortuantly a few of our peers that also lost their contracts didnt research the RCW or WAC and sent notices out when they were told to. Causing the loss of thousands of premium dollars along with devistating damage to their reputations.
Moral of the story…dont let any carrier tell you what you can or can not do…research the law in your state. And hold the carrier accountable.
Good point JLT. I find it hard to believe that Eppinger “didn’t care which way it went”.
The only issue I have is that the reason for termination needs to be defined and this could create a different method for handling the existing book. If the agent or broker did something unethical or didn’t retain the required legal forms (this would put the company in extreme jeapordy), then I believe it’s in the company’s best interest to non-renew the business asap. On the other hand, if it’s a production issue, the cutomers shouldn’t be put in a position to re-shop for insurance just because the company and the agent had a different set of objectives.
Interesting when an agent is not concerned about their clients but about their book of business. I’ve seen them balk over these non-renewals when the company is having financial difficulties and can’t keep writing the business. And apparently, the contract becomes meaningless, unless you can terminate immediately with the agent and continue his book of business under contract terms for as long as the law requires. Makes it very difficult to end a relationships with a troublesome agent. As you can see, I’ve worked the company side. But mostly, I think it’s regrettable that the customer gets the squeeze play between two warring factions.
I agree with the ethics issue. No carrier should be stuck due to an agents misrepresentation or financial instability however…this isnt the job of the carrier to police this agents actions.
That is what the Insurance Commisioner’s Office is paid to do. I have seen enought displinary actions to know that when a carrier reports these unethical agents they usually act very quickly to seize the offending agent by the scruff of the neck to prevent any possible harm to the consumer.
From an ethical standpoint it is our job at any level, Wholesaler, MGA or retailer to protect our consumers from a carrier’s whim. Isnt that why we all get paid the big bucks ;o)
Our company is committed to the agency system for distribution. I am surprised that an agent would have to go to court to fight for what was his in the first place, the book of business that he built. I read all kinds of horror stories in Insurance Journal about some of the big, national carriers; apparently they get too big and forget who it was that helped make them that way…we are NOT going to direct writing and it is easy to compete with the direct writers because we rely on hometown agents who still actually know their clients. As for this run off, this sounds like the company and agent had a very bad divorce…
I have experience with one company that terminated 5 agencies on the same day withoutgiving good reasons. It turned out that the real reason was that they all had sizable books of personal lines on Long Island where the company perceived a coastal axposure problem. This was the company’s way of getting around state laws. All 5 agencies have lost a ton of that business and the company go its way.
How sorry is it when a company that uses the independent agency system as their main means for distributing business, they turn around and make the agent fight tooth and nail, THEN appeal the decision, just so precedented history can go on. Is this a company you want to represent?