Compensation Controversy Leads to More Work, Stress for Insurance Agents and Brokers, Best's Review Survey Finds.OLDWICK, N.J. -- In the wake of ongoing controversies over producer compensation, agents, brokers and the insurers who support them are being forced to provide more information and paperwork, and must answer more questions, according to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. a new survey conducted by Best's Review magazine. Clients who formerly handled insurance business in a less-formal manner are requiring greater documentation, while agents and brokers report they must now submit more proposals and bids for the opportunity to provide coverage, respondents In the context of marketing research, a representative sample drawn from a larger population of people from whom information is collected and used to develop or confirm marketing strategy. said. "Customers question policy provisions in great detail ... (and) want more information on the companies," one agent/ broker reported. Respondents included 493 insurance or insurance-related professionals; 73.2% are agents, brokers or financial advisers. Other findings: --39.1% said they are contacting clients more frequently in recent months. --23.1% have stepped up training for staff. --15.2% said they were recasting re·cast tr.v. re·cast, re·cast·ing, re·casts 1. To mold again: recast a bell. 2. marketing materials. "(We) have disclosed contingencies Contingencies (ISSN 1048-9851) is the bimonthly magazine of the American Academy of Actuaries, providing a large and diverse readership with general interest and technical articles on a wide range of issues related to the actuarial profession. on our proposal and invoices," one agent/broker said. Several hope to head off questions with their letters to clients and prospects addressing the recent controversies and outlining their positions on those issues. Some report they've they've Contraction of they have. they've have conducted fresh reviews of all contracts and agreements, and others are putting in systems that provide more openness regarding terms and conditions. Asked what lessons insurance professionals should draw from the recent controversies, many respondents said the key to retaining good relationships will mean disclosing all commissions and fees to clients. Not all agreed. "Full disclosure is not necessary as long as the buyer is happy with his purchase, and could even be bad for business and bad for the economy," one producer wrote. "There are hundreds of industries, from doorknobs to cars, that provide a 'spiff' or commission to the salesperson or selling entity once a threshold is met. These are never disclosed to the buyer and do not need to be." A small group recommended changing selling-fee structures. One respondent In Equity practice, the party who answers a bill or other proceeding in equity. The party against whom an appeal or motion, an application for a court order, is instituted and who is required to answer in order to protect his or her interests. said the lesson from the recent controversies over insurance selling and reporting commissions was: "not to charge or collect any fees and/or and/or conj. Used to indicate that either or both of the items connected by it are involved. Usage Note: And/or is widely used in legal and business writing. contingent commissions Contingent commissions is a term used in the American insurance industry for any kind of broker's commission which is contingent upon some event occurring (instead of a commission paid on the sale itself). In the UK this form of payment is known as Overriders. and work on commission basis only." Complete results of the survey are available in the April edition of Best's Review, published by the A.M. Best Company. To subscribe, call (908) 439-2200, ext. 5742 or visit http://www.bestreview.com/subscribe. A.M. Best Co., established in 1899, is the world's oldest and most authoritative insurance rating and information source. For more information, visit A.M. Best's Web site at http://www.ambest.com. |
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