Agents Being Forced to Place Additional Lines of Business to Gain Access to Others

Jul 1, 2015

  1. reedrhoden
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    reedrhoden Super Genius

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    Situation: wholesaler/program manager has an exclusive market for product 'A'. Product 'A' happens to be in high demand right now and many agents are desperate need of a home for their product 'A' clients. So this wholesaler exploits that need and says we will quote product 'A' for you but only if you place product 'B', product 'C', and product 'D' with us as well. Is this legal? I know 10+ years ago when I was an independent agent in Louisiana, one of the liberty mutual affiliates America First, was told that it was illegal for them to essentially hold a product hostage. In this case they were heavy on the home side in Louisiana so they made a rule that they weren't quoting any more monoline homes. If you wanted a home quote you had to buy a home/auto package. The problem was that their auto pricing was out of line. Same situation here. This wholesalers is forcing their agents to sell over priced products 'B' 'C' and 'D' in order to gain access to product 'A'. If it's not illegal it should be. It's causing the agents to act in other than the insured's best interest. Thoughts?
     
  2. insurance1822
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    insurance1822 Guru

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    I'd do it if i were them.
     
  3. XdateNotSexDate
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    XdateNotSexDate Expert

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    I saw this on the commercial side. Had access to Chartis for construction. They would quote GL, Auto and WC. The pricing was predicated on placing at least 2 of the lines with them and usually it would be a dirt cheap GL but a less competitive auto quote but they'd give an optional mono-line pricing if it was necessary. I don't see the problem with it, if they require it as a package deal and the bottom line looks good then why not? Is there special coverage on the policy that is exclusive to the carrier? Either way it seems like a fair, albeit annoying option for an agent.

    www.InsuranceXdate.com - prospecting & lead management for commercial agents
     
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