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NASFA
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AMD92 Opinion - Assurant
Health
In the recent past, State
Farm in different Zones has been offering AMD92 which
they are referring to as the "Assurant handoff." The
basic concept is that if you don't want to sell Assurant
Insurance, you may let the Assurant people do all of the
work and they will pay you half of a health insurance
commission.
Before analyzing AMD92, one should be thoroughly
familiar with AMD66.2 which is
the most recent IPSI Agreement offered by State Farm.
Our criticism of that Agreement was done January 4,2007.
Click here for a copy.
We were generally not in
favor of AMD66.2. Since you have to sign that before you
can sign AMD92 there would seem to be a problem. The
basic problem is that you are going to be paid reduced
commissions for business State Farm claims it referred
to you. Now they are doing the commission reduction the
other way. That is, they are going to pay you a reduced
commission if you refer clients back to them, namely
people interested in purchasing Assurant Health
Insurance.
The purpose of AMD92 is to provide for that commission
when you refer clients back to ISPI, Assurant and State
Farm. You will recall that State Farm is the general
agent with ISPI and you are a sub-agent. In other words,
they are receiving a larger commission and then paying
you some portion of it. That has not changed in the
AMD92. The specific changes made are that they now
include language concerning you referring perspective
customers to ISPI or one of its "strategic allies."
In my prior analysis, I discussed the concept of
"announcement" versus commission schedule. That is still
troublesome. Further you need to be advised that they
can change that announcement at any time to provide a
different commission.
The whole concept of ISPI and Alternative Access Point
is troublesome to a conscientious State Farm agent.
State Farm is looking for opportunities to pay lower
commissions to the agency force. AMD92 is a further
effort in that direction.
NASFA's suggestion is that if there is insurance to be
sold a State Farm independent contractor agent should be
selling it and receive the full commission for it. |
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