New Agency that is expanding needing some advice

[c6_jake]

We are an established Life and Health agency with a primary focus on annuities, and we recently started a P&C side. We are direct with many companies on our autos and have recently been appointed to some MGAs for our homes. I have a few questions if someone could be kind enough to answer them. I got a rc estimator from on of these MGAs and im wondering if this is the only way that companies do the replacement cost on homes. Kick some ideas my way because the values coming off of these forms seems way high and it is killing my quoting on some of the homes.

Also, Im considering employing some sub agents and im wondering about how much of their commission I should take (they wont pay for building etc.) and if I should get an aggressive non compete for the agents to sign in order to protect the business. Thanks for any ideas

 

[c6_jake]

anyone have any suggestions on a noncompete? must have clauses or possibly a form? What percent does an agency usually keep on the p and c side? life and health side? Thanks for the input!!!!

 

[TXINSURANCE]

I am not an Attorney but non competes generally must contain:

-What is protected, must be VERY specific
-Time period of protection
-Geographic area of protection

There are a TON of laws state to state as to this criteria you need to consult an attorney. They are also next to impossible to enforce.

 

[wilkin]

A friend of mine who used to sell law books to attorneys once told me that a non compete agreement should include a clause regarding "separate compensation" for the non compete. Be sure to ask your attorney about this.

 

[tkirk97]

i own a P&C i would setup a 2 year no compete, typically for a designated area, we limit it to just 2 counties in our state, our attorney told us anything more than that would be deemed not reasonable and would not hold water.

We pay subagents 50% of our first year commission and 25% of our renewal. They have production req's to get paid renewals if they don't hit those no renewals and only FYC. that's what we do for P&C.

On the life & Health side the agency keeps 25% of FYC and Renewals, agent gets 75% of total comp.

Both commission levels are considering that the agent is 100% commission only. If there was a salary involved i would change those numbers.

We also have a bonus structure for our agents.

 

[djs]

This is an old thread, but I think the only type of non-compete that holds water in court would be not stealing clients. If someone writes for you today, quits, and starts writing for someone else tomorrow, they have every right to do this, as long as they don't come and raid your book.

Dan

 

[exofficio]

i own a P&C i would setup a 2 year no compete, typically for a designated area, we limit it to just 2 counties in our state, our attorney told us anything more than that would be deemed not reasonable and would not hold water.

We pay subagents 50% of our first year commission and 25% of our renewal. They have production req's to get paid renewals if they don't hit those no renewals and only FYC. that's what we do for P&C.

On the life & Health side the agency keeps 25% of FYC and Renewals, agent gets 75% of total comp.

Both commission levels are considering that the agent is 100% commission only. If there was a salary involved i would change those numbers.

We also have a bonus structure for our agents.

A quick question on your life-health side:
75% for leads generated by your agency, correct? What if the agent happened to bring in their own buiness to add to your book? And then what if they leave, but you still have to maintain/service the account (group health)?

Thanks!
XO

 

[tkirk97]

I pay the agents 75% of tha agency commission whether they generate the lead or not. If the lead was generated by the agency and i retained service and that agent left IE: Group health, there would be no renewal paid to writing agent and i would more than likely have another agent assigned to the account and take the renewal commissions.

 

[James]

I pay the agents 75% of tha agency commission whether they generate the lead or not. If the lead was generated by the agency and i retained service and that agent left IE: Group health, there would be no renewal paid to writing agent and i would more than likely have another agent assigned to the account and take the renewal commissions.

Okay, so why would an agent sign up with you then? If you don't offer a guarantee salary, what do you offer the agent to come aboard to only take such a haircut on all business including no vesting interest in their production?

 

[elder]

This is an old thread, but I think the only type of non-compete that holds water in court would be not stealing clients. If someone writes for you today, quits, and starts writing for someone else tomorrow, they have every right to do this, as long as they don't come and raid your book.

Dan

Not if the sub agents are paid an advance commissions. Then they cannot touch any business that was written on advance until advance date is passed. I will sue any agent that rolls and advanced commission client.