The Independent Insurance Agents of Texas strongly denounced as inaccurate and misleading, the claims made against independent agents and brokers by the Consumer Federation of America (CFA), a Washington-based consumer advocacy group. A report recently released by the CFA makes unsupported and misleading statements about the way independent insurance agents work, and it offers irresponsible and incomplete advice to consumers, the IIAT said.
“The report wrongly maintains that industry compensation practices encourage independent insurance agents to provide less than the best service and price to customers,” said Bill Harrison Jr., president of IIAT and president of Coleman Company Insurance in San Antonio.
Nearly every sales industry in the country uses some form of incentive compensation to reward sales performance, he said. The CFA study makes unsubstantiated and baseless claims that independent agents are influenced to place business with certain carriers based on these compensation practices.
The IIAT said the short-sighted analysis in the report emphasizes only price as a basis for selecting insurance policies, when there are many other important factors affecting consumers’ insurance decisions, such as coverage, carrier financial strength and service. Additionally, stiff competition in the insurance marketplace means that independent agents inevitably would be out of business if they didn’t meet the needs of customers.
J. Robert Hunter, a former Texas insurance commissioner, authored the CFA study.
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