Since I have been solicited by both IMOs and FMOs, I have been trying to find out just what is the difference. No one seems to know, or rather everyone seems to have a different opinion.
I am just conjecturing, but it appears to me that Field Marketing Organizations have a financial interest vested by the insurance companies they carry. Why else would they be called "Field" marketing? Independant Marketing Organizations, on the other hand, I suppose would have a number of independent relationships with companies and negotiate contracts on volume of sales.
If indeed, insurance companies have a financial interest in the FMOs they contract with, this might explain why the agent contracts are so uniform. They are simply an extension of that insurance company.
GreenSky has suggested that an IMO is "just below" an FMO in heirarchy. I am not so sure. I see them as a parallel distribution channel.
Re: FMOs and IMOs: What's the difference?Go to Top
Quote:
Originally Posted by GreenSky
I've done more than suggest that. I've stated just that.
The IMO reports to the FMO. The FMO reports to the carrier.
Rick
You seem to be very sure of this. In financials marketing, the two distribution channels appear to be as I stated. How sure are you that this is structured as you say in the health insurance field? Perhaps it is confined to the MA organizations. No?
Could this be true only of your distribution channel?
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Quote:
Originally Posted by retread
You seem to be very sure of this. In financials marketing, the two distribution channels appear to be as I stated. How sure are you that this is structured as you say in the health insurance field? Perhaps it is confined to the MA organizations. No?
Could this be true only of your distribution channel?
It's true of every FMO I've worked with, but I only work in the health insurance field. (Life insurance works through GA's).
Can't speak for the financial marketing. Perhaps I should have been more specific.
Maybe an FMO or IMO who is on the board can verify or disagree with my statement.
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Rick,
Can you address the issue I raised about the financial interest of insurance companies in their FMOs? I understand that, in some distribution networks, some FMOs are completely owned by the companies they represent, while others are partly owned by them. Is this true in the health insurance industry?
If anyone else reading this post has some info regarding this, please let us know. I know some of you out there are FMOs. C'mon.... 'fess up!
Re: FMOs and IMOs: What's the difference?Go to Top
Quote:
Originally Posted by retread
Rick,
Can you address the issue I raised about the financial interest of insurance companies in their FMOs? I understand that, in some distribution networks, some FMOs are completely owned by the companies they represent, while others are partly owned by them. Is this true in the health insurance industry?
If anyone else reading this post has some info regarding this, please let us know. I know some of you out there are FMOs. C'mon.... 'fess up!
I'm not "on the inside" so I can only give you the information I have from an agent's perspective.
However, every FMO I have worked with has been an independent contractor and has contracts with various insurance carriers.
My guess (and it's really just a guess) is that there are bonuses paid for production and perhaps there are some conditions that an FMO must be somewhat exclusive to various carriers (one of my FMOs has this arrangement with one carrier), but they are not owned.
If the FMO system dissolved, I don't know that our commissions would increase, but at least it would reduce the number of people whos hands are in our pockets.
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The FMO system also appears to provide some separation from the carrier in the area of accountability. This may or may not be the case.
I think the concept that the FMO would provide training support for their downline has not been a big concern until recently. Since the FMOs have dropped the ball on this, the companies have had to pick up the slack under the direction of CMS. If I am correct, you will begin to see more involvement in the coming months with FMOs starting to do their due diligence. I can't see carriers paying FMOs an override that is based on their providing sales support if it doesn't exist much longer. The carriers will either eliminate the FMO or buy them out if things don't change. Training support costs money. For the FMO to shrug off this responsibility is putting their continued existance in jeopardy.
Personally, I will not contract with an FMO that does not have a decent web site where I can get up to date info and has available resources. Leads are beginning to be less and less an issue.... I can get these myself. But having to spend the time to keep current with all the regulations takes away from my sales activity. FMOs need to recognize which side of the bread their butter is on and give us this support. If they are too lazy to do this, we need to be able to move on. This is why I am very supportive of Rick's efforts to make full disclosure of all parties to agency contracts, and relax the restrictions of agents to transfer or dump an FMO not providing sufficient support.
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Okay, I may know a little on this subject, so here goes. An FMO is a very large marketing organization (usually multi state or national) who may or may not have been appointed directly with the carrier (in some cases they are hired by "marketing partners"). An IMO is one level below that, a kind of "middle man".
So essenitally, if you want to limit the number of people in the food chain above you, look to FMO's or even Marketing Partners if you can't go direct with the carrier. A lot of carriers have very limited marketing capabilities (good with support, but not at hiring) and that is how the other groups become involved.
I am not advocating any level as being better or more moral than the others, just offering info from someone who is a part of that end of the business.
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Latest info: Just yesterday I learned that FMOs can be multi-level, i.e. more than just one, each under the other. When I first saw this, I thought it was paperwork lag, but on broaching the subject, was told of the tiered FMO structure (FMO level 1, FMO level 2, etc.). I am not sure if they go beyond level 3.
On another note, I was informed that at least some of these FMOs sit on advisory panels with major carriers. They do push for better commission rates for us, believe it or not! (Not to mention other items such as provider relations, comparable benefits between plans, etc.)
The FMO I met yesterday was very personable and worked his way up from the bottom. He knows what it takes to make a sale, and it shows.
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FMO,IMO,BGA,MGA,GA I am all of these things it just depends on what the carrier wants to call us.
I would not get to hung up on what it the contract says. I would just make sure who ever you deal with can go to the home office direct. They would then have the top contract ie:FMO,IMO, BGA, MGA, GA, DP.
FMOs and IMOs: What's the difference?
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