Help in getting my new P/C agent appointed!!!!

insuranceexec · 12-13-2008, 12:32 PM

I just recently hired an individual to help work our book of business on the P/C side. In doing this I quickly found that I can not get direct contracts with P/C carriers; because I have not been in the P/C business long enough, I personally concentrate on the commercial side. To make a long story very short, I had my new hire contract with a local agency, and worked out an agreement.

So for the last two weeks my new hire has been putting information into his contact manager software so that the new guy could send out a form letter to all of my existing clients telling them my firm would now be offering a new line, and the he, the newbie, would be following up with them shortly.

Yesterday after receiving the contract information from Safeco in particularly, and after receiving phone calls from some of clients stating that the agency owner has been contacting my clients; I noticed that the comp was not what we had agreed upon. The agency owner got upset when I confronted him, and he told me that he was going to cancel my new agents contract. The problem here is that the agency owner stated that he was terminating it for cause. So with all of that being said I have two q1question:

If an agents has been terminated for cause and has not even written any business, will that effect his future appointments with another carrier?

What constitutes a termination for cause on the P/C side? I have looked at the local department of insurance and can not get a clear definition. I thank you in advance for your help.

djs · 12-13-2008, 01:29 PM

You've just been had.
Of course, find out what the 'cause' is, should be something simple like you didn't have the proper E&O coverage, or he felt you misrepresented something. It could be something devious, like now he has your contacts to market to and no longer needs you.

I don't understand your comment about you concentrate on commercial side. If so, you've been doing P&C, just adding a new market.

Direct P&C contracts are hard to get. Non-standard auto is pretty easy to pick up and you can start there and grow. Depends what state you are in for what is available though.

For now, I'd try to figure out if you can salvage the relationship with the current agency. Something went wrong, hopefully a simple misunderstanding. Since it sounds like you haven't actually been appointed yet, chances are, there is no appointment to pull, so not a big deal.

Dan

insuranceexec · 12-14-2008, 06:08 PM

Thanks for your prompt response. I have been in the insurance business for about 8-9 years. I originally started off in the L/H side of things and incorporated the commercial side of things about 4 years ago. I have not written any car/homeowners insurance, and have had no contracts with any "car insurance companies".

I recently hired this guy to run our book of business on the car and homeowners side of things. this other agency agreed to sign us up with his agency and he would take 10% of all commissions and provide my new agent with E&O coverage. Obviously I already have an established office, back office support, telephones, fax and etc...........

I will talk to the DOI tomorrow and figure out exactly what the agency owner filed as a termination for cause. Thanks for all of your help

djs · 12-14-2008, 06:31 PM

If you didn't fill out the paperwork, you were never appointed and as such, could not be released for 'cause'.

Dan

healthagent · 12-14-2008, 06:33 PM

This is a classic example of why you need written contracts.

insuranceexec · 12-14-2008, 07:25 PM

Originally Posted by djs

If you didn't fill out the paperwork, you were never appointed and as such, could not be released for 'cause'.

Dan

I am sorry for not being clear. My new agent that I hired had filled out contracting paperwork, and therefore was appointed with the P/C company.

I do have a "written contract", and would never do business without one. In the contract it states "that either party can terminate the relationship at any time without cause." the problem here is not that the agency owner terminated the contract, it is merely the manner in which it was terminated.

The agency owner was upset when I confronted him about contacting my clients and soliciting to them. Mr. Agency owner is in breech of contract, as stated in our contract/operating agreement. the question I have is how bad did this agency owner screw my new hire? Will this keep my new hire from getting contracted with Safeco again? Thanks for all of your help.

djs · 12-14-2008, 08:56 PM

I actually checked your license, simply because in California, I could have seen this transaction. Nothing was there.

Since you said you just received the papeerwork from Safeco, I assume you actually were never appointed with a carrier, therefore, never released for cause. The contract may have been terminated for cause, but that is only between you and the other agent.

Now, different states report things differently, so I can't say for sure. If you have something from him saying he released you for cause, I would send him a certified letter asking him to explain this.

I would also contact the local prepaid legal person... oops, wait, I didn't say that......

Dan

insuranceexec · 12-14-2008, 09:04 PM

Originally Posted by djs

I actually checked your license, simply because in California, I could have seen this transaction. Nothing was there.

Since you said you just received the papeerwork from Safeco, I assume you actually were never appointed with a carrier, therefore, never released for cause. The contract may have been terminated for cause, but that is only between you and the other agent.

Now, different states report things differently, so I can't say for sure. If you have something from him saying he released you for cause, I would send him a certified letter asking him to explain this.

I would also contact the local prepaid legal person... oops, wait, I didn't say that......

Dan

Thanks Dan I appreciate all of your help. I will be contacting the DOI tomorrow and will write back to give an update.

Does anybody know where I can get some "good" pre-paid legal? LOL. OH thats right it is all good; or so says the sales professional.

1manshow · 12-15-2008, 10:43 AM

If the sponsoring agent licensed your producer, they did so as a sub-agent and gave him/her their own agent number ? This is the most common scenario, especially for accounting purposes. If so, cancelling a sub-agents contract/licensing through the carrier is quite common and would not affect that person's eligibility for re-licensing with a carrier. In the carrier's eyes this is basically the same procedure that is followed each time a CSR is replaced as well.

With your experience in the market, albeit commercially, it is suprising that Safeco wouldn't consider your expansion to PL a benefit worth purseuing.

insuranceexec · 12-15-2008, 03:19 PM

Originally Posted by 1manshow

If the sponsoring agent licensed your producer, they did so as a sub-agent and gave him/her their own agent number ? This is the most common scenario, especially for accounting purposes. If so, cancelling a sub-agents contract/licensing through the carrier is quite common and would not affect that person's eligibility for re-licensing with a carrier. In the carrier's eyes this is basically the same procedure that is followed each time a CSR is replaced as well.

With your experience in the market, albeit commercially, it is suprising that Safeco wouldn't consider your expansion to PL a benefit worth purseuing.

Thank you for your wise words of wisdom. Safeco stated that they had an "over-saturation" of agents in my area, and would be considering new contracts in March of next year. I personally have never heard of such a thing, but this is what was told to me by several people there.

On another thread I heard another agent talking about Superior Access, and owning your block of business on day one. I have spoken to them and it all seems to good to be true. Have you or anybody you know ever dealt with Superior Access? I thank you in advance for your timely response
- - - - - - - - - - - - - - - - - -

Originally Posted by 1manshow

If the sponsoring agent licensed your producer, they did so as a sub-agent and gave him/her their own agent number ? This is the most common scenario, especially for accounting purposes. If so, cancelling a sub-agents contract/licensing through the carrier is quite common and would not affect that person's eligibility for re-licensing with a carrier. In the carrier's eyes this is basically the same procedure that is followed each time a CSR is replaced as well.

With your experience in the market, albeit commercially, it is suprising that Safeco wouldn't consider your expansion to PL a benefit worth purseuing.

This is exactly how things went, and I appreciate you telling me how it really is. Again thanks for the information.
- - - - - - - - - - - - - - - - - -
I just got off the phone about 20 minutes ago with the DOI, and they stated that my agent could not be terminated for cause. Apparently in the state of Arkansas, an agent can only be terminated for cause for three reason:

1. Stealing money or mis-appropriating the clients insurance premiums.

2. mis represented the terms of the insurance contract.

3. Or doing harm to the sponsors agency. I do not know what this means in its entirety, and the DOI person I was speaking with just told me that my agent had not violated any of the pre-determined conditions. He further stated that he could not see anything that was done.

The scumbag, agency owner simply wrote that we had a disagreement and that he wanted my agents contract terminated for cause. Long story short! The agency owner was just blowing smoke. I thank everyone who posted for their words of wisdom and I look forward to posting with you in the future. Happy Hunting and good luck.

1manshow · 12-15-2008, 08:37 PM

Superior access is not available to Pa agents to my knowledge. We have, however, licensed through a similar program to get Travelers without making a premium committment. The downside to the cluster is that when you become eligible to go direct with Safeco, your contract with the cluster may forbid you to license direct with a carrier they are providing you access to. You would have to analyze the potential loss of renewal income to this type of contract restriction. My knee jerk reaction would be to meet with several other national/regional carriers before committing to giving up a piece of your commissions.In Pa we are seeing many of the major carriers being competitive in PL with the advancement of scoring platforms and they seem to be acquiring an aggressive appetite for market share.

Best of luck to you

insuranceexec · 12-15-2008, 09:15 PM

In speaking with Superior Access they told me that there was no premium committment; which again is another good reason to do business with no prem requirements. Do you know anybody who has dealt with them? What was their experience?

djs · 12-15-2008, 09:49 PM

I've dealt with Superior Access, they behave exactly as they say they will. Now, I'm in California, so I don't know the rules for anywhere else.

They have no problem with you getting appointed directly with a carrier, if the situation permits. In fact, this is why I use them, for access to carriers I don't do enough business with direct to warrant being direct, but still have the occassional need for the market availability.

Dan

insuranceexec · 12-15-2008, 11:53 PM

Originally Posted by djs

I've dealt with Superior Access, they behave exactly as they say they will. Now, I'm in California, so I don't know the rules for anywhere else.

They have no problem with you getting appointed directly with a carrier, if the situation permits. In fact, this is why I use them, for access to carriers I don't do enough business with direct to warrant being direct, but still have the occassional need for the market availability.

Dan

I again thank you for your prompt response. I will call and talk to Monique tomorrow to get setup. Thanks and have a great day....