Ghost Writing is Not Allowed

[Crabcake Johnny]

A few conversations with agents happens so often that I should just play a recorded response. One question is "I'm dead broke and need to make six figures and by the way, I'm not cold calling" and the other is "I can't get a release."

You can't get a release which means in most cases you have to sit out for six months. In certain situations, when the agency has you stitched up with almost every major carrier it's not as simple as just picking up different carrier contracts.

This is when we get to ghost writing. What's that? It's when you submit business through another licensed agent or agency. As long as you're indeed licensed an even appointed to write business through that carrier, this is jaywalking at best (much more of a violation if you're not appointed with the carrier.)

The business goes under the agency's/manager's name and you'll have to trust them cut you a check.

My post is this is not really "allowed" in the industry. So under no circumstances should you contact another agency, tell them you situation and start submitting business under their number for six months before you can formally get new appointments.

Remember, don't do this.

 

[NCAgent]

It also gets tricky doing this if you get a brother, sister, spouse, or family member licensed and submit business under them. If you screw up you put their ass on the line, and that relationship with them.

I won't lie, I ghost wrote a few things before with a family member. But I realized I don't want them to be a part of an E&O claim if something happened, which almost did with one client.

 

[Crabcake Johnny]

You're absolutely correct. Anyone allowing an agent to ghost write under them assumes the E&O liability.

If I allowed anyone to write under me I'd want to go over those applications and who knows, maybe call a few of their clients for quality control.

But again, don't ghost write.

 

[cds251]

Its not allowed, but very prevalent.

Especially in the PC world......walk into any P&C shop and you can bet your bottom dollar that they have CSR's, account execs etc writing business WITHOUT a license........

 

[Norwayguy]

Its interesting that ghost writing is mentioned...The better way would be to partner with someone else and split the commission. Its not ghost writing if the person signing the app actually took it. At least in Maine it is legal to share commission with another licensed agent as long as the other agent holds the necessary license....

So if they are L&H Licensed but haven't down the partnership training and as such can not sell LTC they could not split commissions on LTC.

Why would anyone go out on dual appointments and split commissions...Lets be honest most people have an activity problem in this business and are not seeing enough clients.

My own personal solution to this perdicament is to spread my contracts out to different FMOs so I'm never totally screwed. The downside is that I give up whatever marketing bonus I might acheive by having everything with one FMO.

 

[HomeService]

Its not allowed, but very prevalent.

Especially in the PC world......walk into any P&C shop and you can bet your bottom dollar that they have CSR's, account execs etc writing business WITHOUT a license........

For some reason the P&C world is different. Life and Health= it is a no-no. P&C= it is common.

 

[Norwayguy]

For some reason the P&C world is different. Life and Health= it is a no-no. P&C= it is common.

Maybe because the agency owner:

1. Already has E&O liability for his employees.
2. Everything happens under his close control in the office.

Not saying its right.

 

[NCAgent]

Sometimes it takes forever for an appointment to come through, so the GA allows it during the appointment time for P&C.

I also know some people have it set up where you can get book ownership- the GA will basically make it so the people/clients that are NOT going to be shared for book ownership go under the GA code and the ones that are owned by the producer go under his sub-code. It's another way of organizing things.

Also, the GA has everything under his E&O since there is a strongly established hierarchy in the agency compared to the L&H side. He is going to take responsibility no matter who the code belongs to, so why should it matter for anything more than keeping track of ownership and commissions?

 

[Bob Klee]

Its not allowed, but very prevalent.

Especially in the PC world......walk into any P&C shop and you can bet your bottom dollar that they have CSR's, account execs etc writing business WITHOUT a license........

Maybe it depends on the state?
But I personally know of two cases where the Agent lost his license/agency for allowing non-licensed staff to talk about coverages, much less write a policy! [easily available online in many states to see why an agent lost or has a suspended license.]

So me personally, you're not talking coverage, how a policy works for claims, much less writing a policy without being licensed in TN/KY. Can't speak for other states.

Your mileage may vary of course

 

[cds251]

I never said it wasn't illegal.....just that it happens a lot, and more in the P&C world than L&H.

I would assume the risk would be greater in the P&C arena for this than L&H....