Insurance Journal Forums

My client gets approached by another agent. Agent will buy thousands of dollars of client's product only if client moves their insurance to this agent. Client moves account to other agent, agent buys products. I know this happens all the time. Do you all just forget about it?

If a client moves their account JUST for that reason, YOU don't need them as a client.

That's a pretty shallow business relationship. Beyond that, how does the client know that they're getting a good program from this agent?

This happens ALL the time? I don't know that many retail agents who can afford to go around spending thousands of dollars on products just to secure the insurance....maybe it happens once in a while, but don't think it's very common at all. I have been in the biz a long time, and worked for a pretty successful retail broker...we sometimes patronized a restaurant or service shop that we wrote, but seriously....for every $1000 of "product" the agent buys to buy the business, he needs to write about $6500 in premium, and that's just to break even....

LadyBroker is right. I don't think your client really liked you or had faith in your abilities.

I am always asking for the business at the places I trade in. So was the other guy, and so should you be!

That's how this business works!

Swymmer

I see no ethical breach here.

Nobody lied, stole, or took advantage of another.
No libel, slander, discrimination, force, or fraud.
No law was broken.
No mention was made of payoffs or kickbacks.

Kant tells us to ask, what if everyone did it?

I see no harm here - unless you are on the short end of the reciprocity stick.

goredsox wrote:My client gets approached by another agent. Agent will buy thousands of dollars of client's product only if client moves their insurance to this agent. Client moves account to other agent, agent buys products. I know this happens all the time. Do you all just forget about it?

scott wrote:I see no ethical breach here.

Nobody lied, stole, or took advantage of another.
No libel, slander, discrimination, force, or fraud.
No law was broken.
No mention was made of payoffs or kickbacks.

Kant tells us to ask, what if everyone did it?

I see no harm here - unless you are on the short end of the reciprocity stick.

Scott,

If everything was as goredesox said, rebating is involved. In most jurisdiciton this is illegal. In all jurisdictions this is unethical.

I do agree with an earlier comment that it would not be economically feasable to do this as a standard business practice. If this is a strong center of influence, that could make a difference on the economic feasability.

Greg Wells, CIC

The transaction sited was, I'll buy from you if you buy from me. No return of premium or commissions was mentioned.

How is this rebating?

Yes, it seems a very broad stretch for rebating.

I just wouldn't have such an account. I have a lot of contractors, some do residential work, some commercial work. So am I to develop work for every residential contractor or go buy commercial property to provide work for the commercial people? I don't think so...at least not me. So that small residential account that pays me a $150 commission off of a $1,500 premium, would I be expected to do $1,500 of business with the contractor.

The problem people that are in the, do - business - with - me or else is that they don't know what we earn off of their premium. Most people are amazed to find that because I go through third parties that I end up with an average of 10 percent commission. I think people are under the misconception that we get paid like a retail merchant that may have a much higher markup.

scott wrote:The transaction sited was, I'll buy from you if you buy from me. No return of premium or commissions was mentioned.

How is this rebating?