Vesta Insurance

[yoyowordup]

Anyone write for Vesta before they tumbled . . .

I got a bill from them for return commissions based on all policies canceling effective 8/24/07, the date they went out.

It's probably fair, but it just doesn't seem write because of all the work we had to do to replace coverage and the potential exposure we face by having placed our clients with a carrier that went under.

If anyone else is facing this issue I would be interested to know if you received a bill and if you have paid it or plan on paying it or fighting it.

Thanks for the input!

[Duke]

Of course, you ought to return the commissions for the unearned premium. It's not your money to keep.

Any time an insurance policy is cancelled by a company, regardless of the reason, an agent has to put in some effort to replace coverage. That doesn't justify keeping unearned commissions.

Do the right thing. Give them their money and sleep well at night.

[gregcw]

I know that it's not fair. Years ago I was writing with the Northwest Insurance Company when the Oregon DOI had it placed in recievership. While it was being shut down, I had a policy assigned to me from a Farmers agency that was retiring. The customer that policy was written for, was also my customr. That agency was aware of my relationship with the customer and, apparently, had the policy transferred to me.

The result was that I had to pay a RETURN COMMISSION That I had never even recieved

This was even more disconcerting because the DOI had requested us to continue placing business with the company while they were trying to rehabilitate it. I agree with Duke though, that paying a return of a commission that you did recieve is part of a normal course of business because the commission is not EARNED until the policy expires or renews.

[mhutch69]

Depending upon the amount of return commissons you owe, I would wait for the liquidator to contact you.

In AZ., we had a rash of insolvencies in the '80's and most state liquidators agreed with our producer position that the commissions were fully earned due to the fact that the policy was not canceled by the insured, nor for non-payment, nor for underwriting reasons.

The policies were canceled due to a BREACH of the contract on the part of the company. Therefore, due to the damages to our offices the insolvencies caused, the work to replace the coverages and their breach not being covered in any producer agreement, we never returned a dime.

These were auto companies and large dollar amounts we were arguing about. But, in most cases, the general agent had poor or no records and the liquidators were working blind. Therefore, they could not produce an account detail.

Just another position. UNEARNED commissions I always return. These were EARNED commissions.

[yoyowordup]

I will definitely sleep well at night because I do the right thing.

I guess I was just checking to see if anyone was fighting them. I think my clients lost some money because I know they haven't received any return premium for their canceled policies.

I've lost my reputation with those clients and feel that I was misled as to the status of the company by the Arizona marketing rep.

Anyway, I'll probably send my check today.

Thanks for the input!!

[tsntyler]

Agents need to reconcile the statement,. on our statement there was no credit for the last check we got from Texas Select (or in your case, Vesta)which bounced. And they also did not credit our account for the 2 policies that were assumed by ASI Lloyds. Agents also need to remember Texas Select paid as earned. So if the premium was not paid in full by mortgage company or insured they need to be sure they are being asked to pay back commission they never received.

Hope this helps!

[LadyBroker]

I looked at the AMBest website, and found that Best had been issuing negative statements about Vesta since 2004. What kind of business did they write? I am not familiar with them here in California, so we have been a little out of the loop on this liquidation.

[CATHIEA]

They wrote homeowner policies - and unfortunately the rates were really cheap. They were a B company but a lot of agents didn't care since the rate was unbeatable. I had them back in 2000 - canceled the contract in 2001 because they still didn't have an A rating - then as a favor to the marketing rep (old friend who needed to make an appointment) I ended up with them again about 6 months before they went under. I can feel your frustration about return commission - unfortunately I didn't explain to my personal lines csr that it was just a favor and to not write anything there - good thing I only ended up with 3 policies on the books. However, that money has to go back.

[LadyBroker]

How did you convince the mortgage companies to take B rated paper?