Crybabies FMO win suit against CMS

[Jim Wright]

Okay, so who do you work for? There are a handful of truly independent unicorns but I'll bet you a steak dinner that you roll up to someone and you don't even know it.

Walter

When you say "roll up" do you mean in totality or some individual carrier appointments.

I work the for The Cason Group. Our FMO services are only the 3rd largest division in our company. Our biggest is group benefit GA services, then we have a Financial Services BGA arm.

We have our Aetna U65 under Agility because we traded them an appointment with BCBS of SC. We also do our MOO Med Supps under The Brokerage resource because we don't have a choice. Same with a few MI carriers because the carriers make you.

We recently cracked the top 100 insurance agencies in the country.

Research & Reports

Welcome to BI Intelligence, home to all of BI’s research and data content. Sign up today to access all of BI’s proprietary rankings when they are published and get full access to the Bl Insurance…

www.businessinsurance.com

Let me know when we're eating steak

 

[MedicareWAA]

When you say "roll up" do you mean in totality or some individual carrier appointments.

I work the for The Cason Group. Our FMO services are only the 3rd largest division in our company. Our biggest is group benefit GA services, then we have a Financial Services BGA arm.

We have our Aetna U65 under Agility because we traded them an appointment with BCBS of SC. We also do our MOO Med Supps under The Brokerage resource because we don't have a choice. Same with a few MI carriers because the carriers make you.

We recently cracked the top 100 insurance agencies in the country.

Research & Reports

Welcome to BI Intelligence, home to all of BI’s research and data content. Sign up today to access all of BI’s proprietary rankings when they are published and get full access to the Bl Insurance…

www.businessinsurance.com

Let me know when we're eating steak

I could have been clearer. Roll up = you're part of someone else's hierarchy, and if you're writing any meaningful amount of business, they use you as leverage to advance their own interests with carriers.

It sounds like you're one of the good guys. You're also diversified which is terrific. Still, if you're running any of your MA/PDP contracts through another group, that group very likely lobbied for killing the new comp rules.

 

[rmhaire]

It sounds like you're one of the good guys.

He is. And we're going to need a video of that steak.

 

[Jim Wright]

I could have been clearer. Roll up = you're part of someone else's hierarchy, and if you're writing any meaningful amount of business, they use you as leverage to advance their own interests with carriers.

It sounds like you're one of the good guys. You're also diversified which is terrific. Still, if you're running any of your MA/PDP contracts through another group, that group very likely lobbied for killing the new comp rules.

The only MA contract through someone else is probably BCBS of MI because they make everyone contract through some local FMO up there. I don't work the territory so I don't want to say for sure.

The rest of the MA's are direct. Agent Pipeline tried to get us under them and we said no.

 

[insurgal81]

Was it multiple FMO's that filed the lawsuit or just one? If our commissions are in fact lowered as a result of the lawsuit won't multiple agents move contracts? I know I will if they are any part of my upline!

 

[MedicareWAA]

The only MA contract through someone else is probably BCBS of MI because they make everyone contract through some local FMO up there. I don't work the territory so I don't want to say for sure.

The rest of the MA's are direct. Agent Pipeline tried to get us under them and we said no.

That's great. Here's to staying independent.

Walter

 

[Tired1970]

They beat nothing . It changes zip . I love it. Fmo's only give a shit about their overrides . From what I read they want to take the $100 overrides from agents . Fmo's were no where when recording hit agents and the 48 hr soa . Agents better never forget the Fmo's will throw agents under the bus to save there overrides . What no one's talking about is carriers irregardless might cut fmo overrides even if they don't have to . Fmo's are delusional to think carriers will cut plans big this yr and there fat overrides not touched

You don't get ORs. You are the agent. When you go to an AEP party, etc...where do you think that money comes from? Your pocket? Oh boy...you are missing lots.

But, you on your own.

Things about FMOs today. (which iritates you and me), There are SO MANY AGENCIES stating they are FMOS...and they take comms out of Agent comms. There are others, who go under another 'AGENCY' who pays a slice of their ORs. Hell, just call me GRMOCOWIERHR level.

Why? For numbers. They think, the more agents they show...the more they get. Fact is...it is the number of policies/per agent. And, ppl need to cultivate that. So "REASON" what I state.

But, then you have legit Brokerage firms like mine....over decade of FMO cultivation...that are direct with Carriers. OUR JOB, is to TRAIN, MAKE YOU AWARE....GROW YOUR BIZ, ETC...so they don't have to hire employees. And OR is cheaper than an employee paycheck. That is the FACT! And we must do our job...or lose our licenses.

I will tell you, that I have sent "termination' letters to agents. Now, THAT MAY SURPRISE YOU! An FMO that sent out termination letters. We run a straight shop. In fact, our Brokers were NEVER PERMITTED TO USE OVERSEAS CALLING CENTERS!

I interview Brokers. I litteraly sit with them and go over what they MUST do & I must comply with; and want a resume. If we don't match...I wish them luck?

You know....and this is my argument to carriers: I'd rather have a 300 man/woman team crushing it <-Get the pun. Than, a huge FMO in debt...10k agents, etc. And agents getting 5 clients per year.

So, you hate us & our kind? Maybe...and I'm not saying me, you just didn't find the right ppl. And there are very good FMOs out there. I can testify...we are not the only ones.

 

[MedicareWAA]

When you go to an AEP party, etc...where do you think that money comes from?

I write around 120 T65 a year and my book is crazy sticky. Every one of those apps is earning someone $300 - $600 (let's call it $400) in year 1 for taking no financial risk and performing very few services. Hard and Soft money. Another $150 or so in years after. I'll gladly pay for my own dinner in exchange for that money.

You sound like you run a high integrity outfit. That's great. But here's another way to think about it. If these services were so wildly helpful, agents would be willing to pay for them out of their own pockets.

Lots of us think this is a racket but it's been this way a long time. Some of these groups are good and some don't do shit but everyone is paid more than necessary.

My issue is with all the soft money. Lots of … well … um … suspicious things happen with and because of that money. Wish the government would leave alone the overrides and crush the soft money instead.

And standardize everything. If overrides are cool, add a cap just like commissions. I think overrides are too high but the transparency and consistency is what matters. Make the cap whatever it'll be. Probably more than I'd prefer. Everyone should just be playing by the same rules I think.

Walter

 

[DonP]

I write around 120 T65 a year and my book is crazy sticky. Every one of those apps is earning someone $300 - $600 (let's call it $400) in year 1 for taking no financial risk and performing very few services. Hard and Soft money. Another $150 or so in years after. I'll gladly pay for my own dinner in exchange for that money.

You sound like you run a high integrity outfit. That's great. But here's another way to think about it. If these services were so wildly helpful, agents would be willing to pay for them out of their own pockets.

Lots of us think this is a racket but it's been this way a long time. Some of these groups are good and some don't do shit but everyone is paid more than necessary.

My issue is with all the soft money. Lots of … well … um … suspicious things happen with and because of that money. Wish the government would leave alone the overrides and crush the soft money instead.

And standardize everything. If overrides are cool, add a cap just like commissions. I think overrides are too high but the transparency and consistency is what matters. Make the cap whatever it'll be. Probably more than I'd prefer. Everyone should just be playing by the same rules I think.

Walter

Thats fine to crush the soft money but that soft money for agents will come out of the agents override . It's funny I've heard nothing yet about exactly what overrides will be . Has any carrier 100% committed to what overrides will be in 2025?

 

[MedicareWAA]

will come out of the agents override

You're not really "supposed" to be sharing MA overrides in the first place. Yes it happens lots but technically it's supposed to be paid by the carrier to the FMO in x change for specific legit admin services. The spirit of the money was that it wouldn't be paid to firms that sold insurance either. It was for groups that built and then loosely oversaw that managed networks of agents. Their biz model was to recruit and then do some basic support.

Anyway the industry has been totally f'ed up with this kind of money. Wasn't this way even 8 yrs ago. U can call the money payment for X but that doesn't mean that's what it really is.

So I say leave the overrides alone and crack the whip on the soft stuff.