How would you interpret this contract provision?

[rousemark]

How would you interpret this provision?

During the term of Agent's authority, Agent shall NOT sell or attempt to sell, or cause or aid any associate, agent or other third party to sell or attempt to sell, any insurance or annuity product of any company or entity other than a member of the Company Group, unless the Company Group does not offer a similar product.

 

[Tahoe Ray]

How would you interpret this provision?

During the term of Agent's authority, Agent shall NOT sell or attempt to sell, or cause or aid any associate, agent or other third party to sell or attempt to sell, any insurance or annuity product of any company or entity other than a member of the Company Group, unless the Company Group does not offer a similar product.

No way I would want to sign that. It makes it seem like you're captive.

 

[rousemark]

No way I would want to sign that. It makes it seem like you're captive.

Yelp.. That is the way I read it.. Unfortunately I signed it before being able to log in and did not take time to read it. I wonder how many more did.

 

[titeye]

That is almost word for word how Senior Life's contract reads, and I also interpret that as captive. In addition, you don't get a copy of it until after you have signed and accepted the commission schedule. Most agents who contract with these agencies are so caught up in the hype of the "opportunity", they never read it, let alone ask to see it before coming aboard.

 

[DonP]

Is that snl they make you sign now and then before signing in ?

 

[Todd King]

How would you interpret this provision?

During the term of Agent's authority, Agent shall NOT sell or attempt to sell, or cause or aid any associate, agent or other third party to sell or attempt to sell, any insurance or annuity product of any company or entity other than a member of the Company Group, unless the Company Group does not offer a similar product.

Is that Senior Life?

 

[scagnt83]

Captive provision in an indy contract? It wouldnt surprise me

 

[shonceman]

How would you interpret this provision?

During the term of Agent's authority, Agent shall NOT sell or attempt to sell, or cause or aid any associate, agent or other third party to sell or attempt to sell, any insurance or annuity product of any company or entity other than a member of the Company Group, unless the Company Group does not offer a similar product.

I remember seeing similar language in a contract I was about to sign many years ago. I called the licensing office at the company and told them I was independent, and the guy who recruited me had stated that the company wasn't captive. He basically said that they never enforce it, so don't worry about it. I answered, "I'm still not comfortable signing a contract with that language in it." So, he told me to just line through that section, mail it to his attention, and he'd make sure I got contracted without that provision. I did, and he did.

Recently I noticed some language when logging on to another company's agent portal. It states that by proceeding, you agree to the provisions contained in the paragraph. I don't remember seeing that language when I contracted. The line that makes me uncomfortable says, "You further agree to NOT solicit, or cause or aid any other person to solicit, any policyholders of [company name] to purchase policies of another life insurance company." I get that they don't want agents to churn business, and I wouldn't do that. But, as an independent, I don't like having my hands tied about what I might be able to offer my clients in the future, especially when a company (like this one) doesn't offer a full range of products. For example, I have a debit client (with a different company) who has a policy on her son. He's starting college this fall to study engineering. So, if his policy was with this company, after he gets established in his career (likely earning low to mid six figures), I can't sell him a policy for a million or two because this company doesn't offer that??!!!!

At least in @rousemark 's example, they leave you with the freedom to go outside if their company doesn't have what the client needs.

 

[rousemark]

I remember seeing similar language in a contract I was about to sign many years ago. I called the licensing office at the company and told them I was independent, and the guy who recruited me had stated that the company wasn't captive. He basically said that they never enforce it, so don't worry about it. I answered, "I'm still not comfortable signing a contract with that language in it." So, he told me to just line through that section, mail it to his attention, and he'd make sure I got contracted without that provision. I did, and he did.

Recently I noticed some language when logging on to another company's agent portal. It states that by proceeding, you agree to the provisions contained in the paragraph. I don't remember seeing that language when I contracted. The line that makes me uncomfortable says, "You further agree to NOT solicit, or cause or aid any other person to solicit, any policyholders of [company name] to purchase policies of another life insurance company." I get that they don't want agents to churn business, and I wouldn't do that. But, as an independent, I don't like having my hands tied about what I might be able to offer my clients in the future, especially when a company (like this one) doesn't offer a full range of products. For example, I have a debit client (with a different company) who has a policy on her son. He's starting college this fall to study engineering. So, if his policy was with this company, after he gets established in his career (likely earning low to mid six figures), I can't sell him a policy for a million or two because this company doesn't offer that??!!!!

At least in @rousemark 's example, they leave you with the freedom to go outside if their company doesn't have what the client needs.

I think we are talking about the same company. And, what it essentially says is if the client has a $10K policy with the company and you decide to increase the coverage by another $10K then you have to put it with them even if you have another company that would be better for the client at that point in time. I could understand if they are talking abut replacement but that is not what it says.

 

[rousemark]

This has been on their sign in page for a long time:

You hereby agree to NOT induce or attempt to induce, or cause or aid in any manner whatsoever any other agent or other person to induce or attempt to induce, any policyholder to terminate any policy issued by _____.

Have no problem with that. I am not going to replace them anyway and it is pretty common contract language.

However, it goes on to say this:

You further agree to NOT solicit, or cause or aid any other person to solicit, any policyholders of _______ to purchase policies of another life insurance company. These restrictions shall continue for a period of two (2) years after the termination of Your authority.

If that is strictly construed, it means if you go into a house and find the client has a policy with them, you cannot even offer the client additional coverage with another company.