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National Association of State Farm Agents, Inc.
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NATIONAL
ASSOCIATION OF STATE FARM AGENTS, INC. |
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NASFA
Home l Contact NASFA
AMD66.2
For a little more than five
years, State Farm has been asking agents to sign a
contract amendment which would permit it to pay you
smaller commissions on business which was sold to a
customer through an "alternate access point."
Let's talk about the simple business decision first: Do
you want to accept business at a lesser commission? If
the answer to that is, "No", then read no further and do
not sign the AMD66.2. I have spoken to many agents over
the years, particularly AA97 agents, who do not believe
that their current contract commissions are enough. Why
then would you be willing to accept new, unknown
customers with no loyalty to you at an even lower
commission? In fact, as contemplated, the customer has
no knowledge of you, let alone any loyalty. As overhead
expenses increase and cost shifting, or cost avoidance
by State Farm continues, the prospect of making less
money on a particular policy cannot be too attractive.
On the other hand, sales people that some of you are,
you may consider this an opportunity to cross sell other
products. Whether you do or not, the initial commission
will be lower, for ten years. Further in my experience,
new business is not being assigned to existing agents.
The telephone calls I receive on the subject are
complaints that all new business is going either trainee
agents or newly minted agents. For a variety of reasons,
and due to a variety of programs, new business is not
going to established agents. So, if you thought signing
was going to get you business to cross sell, forget it.
Read no further, don't sign the AMD66.2.
If you are still reading this article, then go ahead and
sign it. Why? Well for one reason it is revocable. For a
second reason it claims it does not affect any part of
your contract with State Farm. If you really believe
your AFE, then by all means sign it. My problem with
signing it these days is that I don't know what
nefarious interpretation they will put on the AMD66.2
next week, next month or next year. State Farm does seem
to have a way of twisting things in a fashion you do not
expect. Remember, for example: "Agents don't sell?"
There are several other things about the AMD66.2 that
are unusual, annoying or just plain strange. Among those
is the concept of "Brand development fee". Insurance
agents have been getting commissions since the first
time they rang the bell at Lloyds of London. To now
recast the payment as anything other than a commission
is at least worrisome. If you subscribe to the theory
that State Farm does everything for a reason then why
isn't a commission on the sale of insurance?
Next on the list of troublesome ideas is the
"announcement." Not a commission schedule or table, but
an "Announcement." An "Announcement" that can be changed
at any time, at the whim of State Farm. No more pesky
problems like the introduction of the AA97, all they
have to do is change the "announcement".
Finally, the AMD66.2 is not limited to insurance. It is
thus broader than your Agents Agreement and encompasses
any product State Farm may wish to sell. While I
currently doubt they are soon to begin a line of
jewelry, makeup, or woven baskets, I did not think you
would be offering bank products either.
Since its initial introduction, NASFA has been opposed
to the AMD66. That opposition has not changed. We just
don't see the point of signing it based on the realities
of how State Farm assigns business. |
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