Is It Worth It?

[todd02]

Lets say there is a captive agent that wants to have an investment in an independent agency. If this captive agent had a friend who was running the independent agency and the captive agent sent the independent leads that the captive couldn't close, would this sound legit? I know as a captive agent you can not be affiliated with nor refer outside business you CAN NOT write at all....

Also the captive agent would probably have to start from scratch with the independent agent and use a cluster since the new agent wouldn't have any BOP....

Thoughts ideas, do any of you know anyone who does this?

 

[nyc2phi]

Whatever it says in the captives contract he or she can do is what he or she should abide by. I know it sounds obvious but going against that contract is grounds for losing the contract all together.

In most captive cases they can refer business out that they can not write. Some contracts may allow you to get paid on that business and some do not.

 

[djs]

+1 to NYC on this.
..........

 

[insurance1822]

Lets say there is a captive agent that wants to have an investment in an independent agency. If this captive agent had a friend who was running the independent agency and the captive agent sent the independent leads that the captive couldn't close, would this sound legit? I know as a captive agent you can not be affiliated with nor refer outside business you CAN NOT write at all....

Also the captive agent would probably have to start from scratch with the independent agent and use a cluster since the new agent wouldn't have any BOP....

Thoughts ideas, do any of you know anyone who does this?

If I were a captive writing "75k" per month I sure as hell wouldn't want to jeopardize that...

 

[AZDave]

Lets say there is a captive agent that wants to have an investment in an independent agency. If this captive agent had a friend who was running the independent agency and the captive agent sent the independent leads that the captive couldn't close, would this sound legit? I know as a captive agent you can not be affiliated with nor refer outside business you CAN NOT write at all....

Also the captive agent would probably have to start from scratch with the independent agent and use a cluster since the new agent wouldn't have any BOP....

Thoughts ideas, do any of you know anyone who does this?

Yes, seen it in many different ways. Captive needs to be extremely careful in the referral process....the captive companies are watching.
The captive needs to be extremely careful in any sharing of commissions.
The captive needs to be extremely careful in the sales process....your E & O is at stake, and thus your captive career.

Most difficult today is setting this person up as IA.....aggregates and companies are unwilling to give producer codes. They want a large profitable book rollover and experience, then they may take a look. Easy to get the Progressives, and other non standards.

Back in the day easy to set up, say your licensed and experienced spouse as IA and write all the business. Not true today.

Maybe there is a cluster that will take this on and give you access to their carriers..the only ones I know of shy away, unless captive is ready to fully go IA.

Good Luck and Good Selling.

 

[sludgesurfer1]

Yes, seen it in many different ways. Captive needs to be extremely careful in the referral process....the captive companies are watching.
The captive needs to be extremely careful in any sharing of commissions.
The captive needs to be extremely careful in the sales process....your E & O is at stake, and thus your captive career.

Most difficult today is setting this person up as IA.....aggregates and companies are unwilling to give producer codes. They want a large profitable book rollover and experience, then they may take a look. Easy to get the Progressives, and other non standards.

Back in the day easy to set up, say your licensed and experienced spouse as IA and write all the business. Not true today.

Maybe there is a cluster that will take this on and give you access to their carriers..the only ones I know of shy away, unless captive is ready to fully go IA.

Good Luck and Good Selling.

Hi AZDave,

In your experience, why do you believe that the aggregators and clusters would shy away from granting the IA spouse access? Is it risk of them getting dragged into a legal matter, or is it more because they feel that they would only get the 2nd tier business that the captive spouse wouldn't write. I'm just trying to understand the point of view of the carrier.

 

[CaptiveGuy]

I think the best way (goes against your captive contract regardless) to do this without getting caught as a captive agency is to set up a LLC/SCorp and get E&O. Use Superior Access or wholesaler who doesn't allow for binding authority and run your clients there. When you make the switch you can roll your wholesaler book to direct appointments.

If you get caught by your captive company you will be sued though...

 

[AZDave]

Hi AZDave,

In your experience, why do you believe that the aggregators and clusters would shy away from granting the IA spouse access? Is it risk of them getting dragged into a legal matter, or is it more because they feel that they would only get the 2nd tier business that the captive spouse wouldn't write. I'm just trying to understand the point of view of the carrier.

Yes, can be dragged in as part of the captives non compete. Also, they want volume and profit too. But there are more and more aggregators out there, maybe some willing to allow this....I am only familiar with mine.

 

[todd02]

If I were a captive writing "75k" per month I sure as hell wouldn't want to jeopardize that...

75k a month, Na I do that occasionally... This month was only 30k in fire, 22k in auto for new business.

You still stalking me on Facebook lmao!

 

[Guest]

In most captive cases they can refer business out that they can not write.

Am I missing something?

I refer a lot of business out that I could write, but that I'm not competitive on and just don't have a chance of getting. (Example: client has State Farm and is paying $200 a month, I'm $400 a month, but could theoretically write it, but I refer it to a buddy at [insert name of company here]).

I do it and I get a lot of referrals from friends with other captive companies in the same situations. Never thought anyone could (or would) get in trouble for that.