[LTPC-discussions] The battle over your clients

[ltpc-disc@ltpcalums.com]

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The question of who has rights to clients is happening all over.  We do have=
=20
options.  You might have rights to help your clients, and it is worth a=20
look.....
Richard

The Battle Over Clients Is Raging As The Career System Fades

By Mike Siefe

Career insurance companies hire agents with the promise that the agents will=
=20
own their own businesses.=C2=A0 Agents are then encouraged to invest time an=
d money=20
into building their businesses.=C2=A0 Many agents are naturally becoming=20
uncomfortable with the perceived trend among insurance carriers to circumven=
t the agents
=E2=80=99 client relationships.

=C2=A0=C2=A0=C2=A0=C2=A0 From what I have seen as an expert witness and as h=
ead of an association=20
whose agents are involved in battles with their carrier, this perception is=20
spreading and increasing because when an agent is terminated or leaves his o=
r=20
her career company, there is often a battle over the ownership of their=20
clients.

=C2=A0=C2=A0=C2=A0=C2=A0 Most career agents are operating under very old car=
eer contracts.=C2=A0 These=20
contracts frequently overreach in their demands on departing agents and=20
maybe, in large part, unenforceable.

=C2=A0=C2=A0=C2=A0=C2=A0 Often these contracts take the position that the ag=
ent can=E2=80=99t replace the=20
career company=E2=80=99s policies.=C2=A0 The contract may also say that the=20=
agent cannot=20
hire away agents to other insurers.=C2=A0 Finally, these contracts may say t=
hat the=20
agent cannot contract or work with clients.

=C2=A0=C2=A0=C2=A0=C2=A0 These contracts, however, may be ruled unenforceabl=
e, because they do=20
not specify a reasonable time period during which the agent cannot engage in=
=20
such activities as determined by the courts.=C2=A0 Moreover, these contracts=
 are=20
frequently not written to the nuances of different state laws and their=20
interpretations by the courts.

=C2=A0=C2=A0=C2=A0=C2=A0 The thrust of this piece, however, is to deal with=20=
the practical aspects=20
of who owns the client.

=C2=A0=C2=A0=C2=A0=C2=A0 The agent is still the rainmaker who brings the cli=
ent to the insurance=20
company.=C2=A0 Frequently, clients buy insurance from agents who are friends=
, or=20
with whom they play golf, socialize, go to church, or work on charitable boa=
rds,=20
etc.=C2=A0 Many clients cannot even remember from which insurer they have bo=
ught=20
insurance.

=C2=A0=C2=A0=C2=A0=C2=A0 When clients need service, they call the agent.=C2=
=A0 When career agents=20
leave career carriers, they receive requests for service from clients for ma=
ny=20
years.

=C2=A0=C2=A0=C2=A0=C2=A0 Basically, if the agent is doing a good job for cli=
ents, the agent owns=20
a relationship that the insurer cannot easily take away.

=C2=A0=C2=A0=C2=A0=C2=A0 It seems to many agents, however, that insurers are=
 encroaching on the=20
agent=E2=80=99s client relationship.=C2=A0 This encroachment is manifested i=
n several ways.=C2=A0=20
Some companies are not allowing the agent to choose a successor agent.=C2=
=A0 They=20
maintain that the company alone has the right to choose the new agent --- is=
=20
an agent is chosen at all.=C2=A0 Some companies are assigning departing agen=
ts=E2=80=99=20
business to the home office.

=C2=A0=C2=A0=C2=A0=C2=A0 Most career companies will not allow a departing ag=
ent to transition to=20
a brokerage relationship that would allow the agent to continue to be paid a=
nd=20
access client information on existing accounts.

=C2=A0=C2=A0=C2=A0=C2=A0 Although the Internet has provided mixed results on=
 insurance sales,=20
many agents fear their carriers=E2=80=99 initial efforts into this area.=C2=
=A0 Agents have=20
verbalized that =E2=80=9Ctheir career carriers would replace them with the I=
nternet in a=20
minute if they could.=E2=80=9D

=C2=A0=C2=A0=C2=A0=C2=A0 Departing career agents are left with service deman=
ds that they cannot=20
avoid on behalf of former clients.=C2=A0 This service obligation is now, in=20=
fact,=20
harder to perform with a former career carrier that does not willingly relea=
se=20
the information necessary.

=C2=A0=C2=A0=C2=A0=C2=A0 After departing a career carrier, the agent is gene=
rally no longer paid=20
to provide service.=C2=A0 Any uncompensated service that is performed by the=
 agent,=20
in fact, may represent a subsidy to the insurance company.=C2=A0 However, ma=
ny=20
agents feel that they sold the insurance originally, and that, morally, they=
=20
should continue providing service to clients.=C2=A0 These agents really are=20=
uncertain=20
if an agent, or home office person, who inherits the =E2=80=9Corphan=E2=80=
=9D policy will care=20
as much for these clients as they do.

=C2=A0=C2=A0=C2=A0=C2=A0 Significantly increased replacement activity is one=
 of the=20
manifestations of the tug of war over the client.=C2=A0 In the agent=E2=80=
=99s mind, replacement of the=20
business represents control of the client relationship into the future.=C2=
=A0 Yet,=20
replacement goes against the grain for most agents.

=C2=A0=C2=A0=C2=A0=C2=A0 Career agents are taught that replacement is bad (t=
his usually means=20
replacement of the career company=E2=80=99s policies, not another company=
=E2=80=99s policies).

=C2=A0=C2=A0=C2=A0=C2=A0 Four factors often quickly change the agent=E2=80=
=99s behavior in regard to=20
replacement.

=C2=A0=C2=A0=C2=A0=C2=A0 First, efforts by the career insurer to consolidate=
 its relationship=20
with clients often embarrass the agent with clients.=C2=A0 An example would=20=
be letters=20
to clients telling them that the agent is no longer with the company and=20
cannot represent the company.

=C2=A0=C2=A0=C2=A0=C2=A0 Second, the agent starts to learn more about other=20=
policies that may be=20
better than what they offered previously.

=C2=A0=C2=A0=C2=A0=C2=A0 Third, the agent is no longer paid a renewal commis=
sion on the policies=20
that he or she wrote, yet clients still demand service.

=C2=A0=C2=A0=C2=A0=C2=A0 Fourth, the agent is cut off from client informatio=
n by the career=20
insurance carrier.

=C2=A0=C2=A0=C2=A0=C2=A0 These four factors eventually come together and lea=
d to increased=20
replacement.

=C2=A0=C2=A0=C2=A0=C2=A0 The company=E2=80=99s best line of defense against=20=
replacement comes in the form=20
of other local agents who can be enlisted into trying to conserve the=20
business being replaced.=C2=A0 As the career agency system disintegrates, th=
ere are not as=20
many local trainees available to do free conservation work, and the remainin=
g=20
agents are more suspicious of management than ever before.

=C2=A0=C2=A0=C2=A0=C2=A0 Veteran agents are more independent and less likely=
 to spend money on=20
stamps, phone calls, etc. to try to conserve a departing agent=E2=80=99s bus=
iness =E2=80=93=20
particularly since the compensation for a servicing agent is trivial.=C2=A0=20=
Moreover,=20
remaining agents may themselves be close to leaving, giving them cause to be=
=20
even less interested in protecting the insurer=E2=80=99s interests.

=C2=A0=C2=A0=C2=A0=C2=A0 The career agency system is dying quickly.=C2=A0 Th=
is means that the divorce=20
between agents and career companies is almost final.=C2=A0 The custody battl=
e now=20
will be fought over the ownership of the clients.=C2=A0 Career company manag=
ement=20
will have a fairly clear choice.=C2=A0 Companies can continue to pay the ori=
ginal=20
agent and use that agent to provide service to clients, or try to defend aga=
inst=20
increasing replacement activities.

Copyright =C2=A9 January 29 2001 The National Underwriter Company. All right=
s=20
reserved worldwide

(<A HREF=3D"http://www.acfea.org/Default.asp">home</A>)



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<HTML><FONT FACE=3Darial,helvetica><FONT  SIZE=3D6 FAMILY=3D"SANSSERIF" FACE=
=3D"Arial" LANG=3D"0">The question of who has rights to clients is happening=
 all over.&nbsp; We do have options.&nbsp; You might have rights to help you=
r clients, and it is worth a look.....<BR>
Richard<BR>
<BR>
<P ALIGN=3DCENTER></FONT><FONT  COLOR=3D"#000080" style=3D"BACKGROUND-COLOR:=
 #ffffff" SIZE=3D3 FAMILY=3D"SANSSERIF" FACE=3D"Arial" LANG=3D"0"><B>The Bat=
tle Over Clients Is Raging As The Career System Fades</FONT><FONT  COLOR=3D"=
#000000" style=3D"BACKGROUND-COLOR: #ffffff" SIZE=3D3 FAMILY=3D"SANSSERIF" F=
ACE=3D"Arial" LANG=3D"0"><BR>
<BR>
<P ALIGN=3DLEFT></FONT><FONT  COLOR=3D"#000000" style=3D"BACKGROUND-COLOR: #=
ffffff" SIZE=3D2 FAMILY=3D"SANSSERIF" FACE=3D"Arial" LANG=3D"0"></B>By Mike=20=
Siefe</FONT><FONT  COLOR=3D"#000000" style=3D"BACKGROUND-COLOR: #ffffff" SIZ=
E=3D3 FAMILY=3D"SANSSERIF" FACE=3D"Arial" LANG=3D"0"><BR>
<BR>
</FONT><FONT  COLOR=3D"#000000" style=3D"BACKGROUND-COLOR: #ffffff" SIZE=3D2=
 FAMILY=3D"SANSSERIF" FACE=3D"Arial" LANG=3D"0">Career insurance companies h=
ire agents with the promise that the agents will own their own businesses.=
=C2=A0 Agents are then encouraged to invest time and money into building the=
ir businesses.=C2=A0 Many agents are naturally becoming uncomfortable with t=
he perceived trend among insurance carriers to circumvent the agents=E2=80=
=99 client relationships.</FONT><FONT  COLOR=3D"#000000" style=3D"BACKGROUND=
-COLOR: #ffffff" SIZE=3D3 FAMILY=3D"SANSSERIF" FACE=3D"Arial" LANG=3D"0"><BR=
>
<BR>
</FONT><FONT  COLOR=3D"#000000" style=3D"BACKGROUND-COLOR: #ffffff" SIZE=3D2=
 FAMILY=3D"SANSSERIF" FACE=3D"Arial" LANG=3D"0">=C2=A0=C2=A0=C2=A0=C2=A0 Fro=
m what I have seen as an expert witness and as head of an association whose=20=
agents are involved in battles with their carrier, this perception is spread=
ing and increasing because when an agent is terminated or leaves his or her=20=
career company, there is often a battle over the ownership of their clients.=
</FONT><FONT  COLOR=3D"#000000" style=3D"BACKGROUND-COLOR: #ffffff" SIZE=3D3=
 FAMILY=3D"SANSSERIF" FACE=3D"Arial" LANG=3D"0"><BR>
<BR>
</FONT><FONT  COLOR=3D"#000000" style=3D"BACKGROUND-COLOR: #ffffff" SIZE=3D2=
 FAMILY=3D"SANSSERIF" FACE=3D"Arial" LANG=3D"0">=C2=A0=C2=A0=C2=A0=C2=A0 Mos=
t career agents are operating under very old career contracts.=C2=A0 These c=
ontracts frequently overreach in their demands on departing agents and maybe=
, in large part, unenforceable.</FONT><FONT  COLOR=3D"#000000" style=3D"BACK=
GROUND-COLOR: #ffffff" SIZE=3D3 FAMILY=3D"SANSSERIF" FACE=3D"Arial" LANG=3D"=
0"><BR>
<BR>
</FONT><FONT  COLOR=3D"#000000" style=3D"BACKGROUND-COLOR: #ffffff" SIZE=3D2=
 FAMILY=3D"SANSSERIF" FACE=3D"Arial" LANG=3D"0">=C2=A0=C2=A0=C2=A0=C2=A0 Oft=
en these contracts take the position that the agent can=E2=80=99t replace th=
e career company=E2=80=99s policies.=C2=A0 The contract may also say that th=
e agent cannot hire away agents to other insurers.=C2=A0 Finally, these cont=
racts may say that the agent cannot contract or work with clients.</FONT><FO=
NT  COLOR=3D"#000000" style=3D"BACKGROUND-COLOR: #ffffff" SIZE=3D3 FAMILY=
=3D"SANSSERIF" FACE=3D"Arial" LANG=3D"0"><BR>
<BR>
</FONT><FONT  COLOR=3D"#000000" style=3D"BACKGROUND-COLOR: #ffffff" SIZE=3D2=
 FAMILY=3D"SANSSERIF" FACE=3D"Arial" LANG=3D"0">=C2=A0=C2=A0=C2=A0=C2=A0 The=
se contracts, however, may be ruled unenforceable, because they do not speci=
fy a reasonable time period during which the agent cannot engage in such act=
ivities as determined by the courts.=C2=A0 Moreover, these contracts are fre=
quently not written to the nuances of different state laws and their interpr=
etations by the courts.</FONT><FONT  COLOR=3D"#000000" style=3D"BACKGROUND-C=
OLOR: #ffffff" SIZE=3D3 FAMILY=3D"SANSSERIF" FACE=3D"Arial" LANG=3D"0"><BR>
<BR>
</FONT><FONT  COLOR=3D"#000000" style=3D"BACKGROUND-COLOR: #ffffff" SIZE=3D2=
 FAMILY=3D"SANSSERIF" FACE=3D"Arial" LANG=3D"0">=C2=A0=C2=A0=C2=A0=C2=A0 The=
 thrust of this piece, however, is to deal with the practical aspects of who=
 owns the client.</FONT><FONT  COLOR=3D"#000000" style=3D"BACKGROUND-COLOR:=20=
#ffffff" SIZE=3D3 FAMILY=3D"SANSSERIF" FACE=3D"Arial" LANG=3D"0"><BR>
<BR>
</FONT><FONT  COLOR=3D"#000000" style=3D"BACKGROUND-COLOR: #ffffff" SIZE=3D2=
 FAMILY=3D"SANSSERIF" FACE=3D"Arial" LANG=3D"0">=C2=A0=C2=A0=C2=A0=C2=A0 The=
 agent is still the rainmaker who brings the client to the insurance company=
.=C2=A0 Frequently, clients buy insurance from agents who are friends, or wi=
th whom they play golf, socialize, go to church, or work on charitable board=
s, etc.=C2=A0 Many clients cannot even remember from which insurer they have=
 bought insurance.</FONT><FONT  COLOR=3D"#000000" style=3D"BACKGROUND-COLOR:=
 #ffffff" SIZE=3D3 FAMILY=3D"SANSSERIF" FACE=3D"Arial" LANG=3D"0"><BR>
<BR>
</FONT><FONT  COLOR=3D"#000000" style=3D"BACKGROUND-COLOR: #ffffff" SIZE=3D2=
 FAMILY=3D"SANSSERIF" FACE=3D"Arial" LANG=3D"0">=C2=A0=C2=A0=C2=A0=C2=A0 Whe=
n clients need service, they call the agent.=C2=A0 When career agents leave=20=
career carriers, they receive requests for service from clients for many yea=
rs.</FONT><FONT  COLOR=3D"#000000" style=3D"BACKGROUND-COLOR: #ffffff" SIZE=
=3D3 FAMILY=3D"SANSSERIF" FACE=3D"Arial" LANG=3D"0"><BR>
<BR>
</FONT><FONT  COLOR=3D"#000000" style=3D"BACKGROUND-COLOR: #ffffff" SIZE=3D2=
 FAMILY=3D"SANSSERIF" FACE=3D"Arial" LANG=3D"0">=C2=A0=C2=A0=C2=A0=C2=A0 Bas=
ically, if the agent is doing a good job for clients, the agent owns a relat=
ionship that the insurer cannot easily take away.</FONT><FONT  COLOR=3D"#000=
000" style=3D"BACKGROUND-COLOR: #ffffff" SIZE=3D3 FAMILY=3D"SANSSERIF" FACE=
=3D"Arial" LANG=3D"0"><BR>
<BR>
</FONT><FONT  COLOR=3D"#000000" style=3D"BACKGROUND-COLOR: #ffffff" SIZE=3D2=
 FAMILY=3D"SANSSERIF" FACE=3D"Arial" LANG=3D"0">=C2=A0=C2=A0=C2=A0=C2=A0 It=20=
seems to many agents, however, that insurers are encroaching on the agent=
=E2=80=99s client relationship.=C2=A0 This encroachment is manifested in sev=
eral ways.=C2=A0 Some companies are not allowing the agent to choose a succe=
ssor agent.=C2=A0 They maintain that the company alone has the right to choo=
se the new agent --- is an agent is chosen at all.=C2=A0 Some companies are=20=
assigning departing agents=E2=80=99 business to the home office.</FONT><FONT=
  COLOR=3D"#000000" style=3D"BACKGROUND-COLOR: #ffffff" SIZE=3D3 FAMILY=3D"S=
ANSSERIF" FACE=3D"Arial" LANG=3D"0"><BR>
<BR>
</FONT><FONT  COLOR=3D"#000000" style=3D"BACKGROUND-COLOR: #ffffff" SIZE=3D2=
 FAMILY=3D"SANSSERIF" FACE=3D"Arial" LANG=3D"0">=C2=A0=C2=A0=C2=A0=C2=A0 Mos=
t career companies will not allow a departing agent to transition to a broke=
rage relationship that would allow the agent to continue to be paid and acce=
ss client information on existing accounts.</FONT><FONT  COLOR=3D"#000000" s=
tyle=3D"BACKGROUND-COLOR: #ffffff" SIZE=3D3 FAMILY=3D"SANSSERIF" FACE=3D"Ari=
al" LANG=3D"0"><BR>
<BR>
</FONT><FONT  COLOR=3D"#000000" style=3D"BACKGROUND-COLOR: #ffffff" SIZE=3D2=
 FAMILY=3D"SANSSERIF" FACE=3D"Arial" LANG=3D"0">=C2=A0=C2=A0=C2=A0=C2=A0 Alt=
hough the Internet has provided mixed results on insurance sales, many agent=
s fear their carriers=E2=80=99 initial efforts into this area.=C2=A0 Agents=20=
have verbalized that =E2=80=9Ctheir career carriers would replace them with=20=
the Internet in a minute if they could.=E2=80=9D</FONT><FONT  COLOR=3D"#0000=
00" style=3D"BACKGROUND-COLOR: #ffffff" SIZE=3D3 FAMILY=3D"SANSSERIF" FACE=
=3D"Arial" LANG=3D"0"><BR>
<BR>
</FONT><FONT  COLOR=3D"#000000" style=3D"BACKGROUND-COLOR: #ffffff" SIZE=3D2=
 FAMILY=3D"SANSSERIF" FACE=3D"Arial" LANG=3D"0">=C2=A0=C2=A0=C2=A0=C2=A0 Dep=
arting career agents are left with service demands that they cannot avoid on=
 behalf of former clients.=C2=A0 This service obligation is now, in fact, ha=
rder to perform with a former career carrier that does not willingly release=
 the information necessary.</FONT><FONT  COLOR=3D"#000000" style=3D"BACKGROU=
ND-COLOR: #ffffff" SIZE=3D3 FAMILY=3D"SANSSERIF" FACE=3D"Arial" LANG=3D"0"><=
BR>
<BR>
</FONT><FONT  COLOR=3D"#000000" style=3D"BACKGROUND-COLOR: #ffffff" SIZE=3D2=
 FAMILY=3D"SANSSERIF" FACE=3D"Arial" LANG=3D"0">=C2=A0=C2=A0=C2=A0=C2=A0 Aft=
er departing a career carrier, the agent is generally no longer paid to prov=
ide service.=C2=A0 Any uncompensated service that is performed by the agent,=
 in fact, may represent a subsidy to the insurance company.=C2=A0 However, m=
any agents feel that they sold the insurance originally, and that, morally,=20=
they should continue providing service to clients.=C2=A0 These agents really=
 are uncertain if an agent, or home office person, who inherits the =E2=80=
=9Corphan=E2=80=9D policy will care as much for these clients as they do.</F=
ONT><FONT  COLOR=3D"#000000" style=3D"BACKGROUND-COLOR: #ffffff" SIZE=3D3 FA=
MILY=3D"SANSSERIF" FACE=3D"Arial" LANG=3D"0"><BR>
<BR>
</FONT><FONT  COLOR=3D"#000000" style=3D"BACKGROUND-COLOR: #ffffff" SIZE=3D2=
 FAMILY=3D"SANSSERIF" FACE=3D"Arial" LANG=3D"0">=C2=A0=C2=A0=C2=A0=C2=A0 Sig=
nificantly increased replacement activity is one of the manifestations of th=
e tug of war over the client.=C2=A0 In the agent=E2=80=99s mind, replacement=
 of the business represents control of the client relationship into the futu=
re.=C2=A0 Yet, replacement goes against the grain for most agents.</FONT><FO=
NT  COLOR=3D"#000000" style=3D"BACKGROUND-COLOR: #ffffff" SIZE=3D3 FAMILY=
=3D"SANSSERIF" FACE=3D"Arial" LANG=3D"0"><BR>
<BR>
</FONT><FONT  COLOR=3D"#000000" style=3D"BACKGROUND-COLOR: #ffffff" SIZE=3D2=
 FAMILY=3D"SANSSERIF" FACE=3D"Arial" LANG=3D"0">=C2=A0=C2=A0=C2=A0=C2=A0 Car=
eer agents are taught that replacement is bad (this usually means replacemen=
t of the career company=E2=80=99s policies, not another company=E2=80=99s po=
licies).</FONT><FONT  COLOR=3D"#000000" style=3D"BACKGROUND-COLOR: #ffffff"=20=
SIZE=3D3 FAMILY=3D"SANSSERIF" FACE=3D"Arial" LANG=3D"0"><BR>
<BR>
</FONT><FONT  COLOR=3D"#000000" style=3D"BACKGROUND-COLOR: #ffffff" SIZE=3D2=
 FAMILY=3D"SANSSERIF" FACE=3D"Arial" LANG=3D"0">=C2=A0=C2=A0=C2=A0=C2=A0 Fou=
r factors often quickly change the agent=E2=80=99s behavior in regard to rep=
lacement.</FONT><FONT  COLOR=3D"#000000" style=3D"BACKGROUND-COLOR: #ffffff"=
 SIZE=3D3 FAMILY=3D"SANSSERIF" FACE=3D"Arial" LANG=3D"0"><BR>
<BR>
</FONT><FONT  COLOR=3D"#000000" style=3D"BACKGROUND-COLOR: #ffffff" SIZE=3D2=
 FAMILY=3D"SANSSERIF" FACE=3D"Arial" LANG=3D"0">=C2=A0=C2=A0=C2=A0=C2=A0 Fir=
st, efforts by the career insurer to consolidate its relationship with clien=
ts often embarrass the agent with clients.=C2=A0 An example would be letters=
 to clients telling them that the agent is no longer with the company and ca=
nnot represent the company.</FONT><FONT  COLOR=3D"#000000" style=3D"BACKGROU=
ND-COLOR: #ffffff" SIZE=3D3 FAMILY=3D"SANSSERIF" FACE=3D"Arial" LANG=3D"0"><=
BR>
<BR>
</FONT><FONT  COLOR=3D"#000000" style=3D"BACKGROUND-COLOR: #ffffff" SIZE=3D2=
 FAMILY=3D"SANSSERIF" FACE=3D"Arial" LANG=3D"0">=C2=A0=C2=A0=C2=A0=C2=A0 Sec=
ond, the agent starts to learn more about other policies that may be better=20=
than what they offered previously.</FONT><FONT  COLOR=3D"#000000" style=3D"B=
ACKGROUND-COLOR: #ffffff" SIZE=3D3 FAMILY=3D"SANSSERIF" FACE=3D"Arial" LANG=
=3D"0"><BR>
<BR>
</FONT><FONT  COLOR=3D"#000000" style=3D"BACKGROUND-COLOR: #ffffff" SIZE=3D2=
 FAMILY=3D"SANSSERIF" FACE=3D"Arial" LANG=3D"0">=C2=A0=C2=A0=C2=A0=C2=A0 Thi=
rd, the agent is no longer paid a renewal commission on the policies that he=
 or she wrote, yet clients still demand service.</FONT><FONT  COLOR=3D"#0000=
00" style=3D"BACKGROUND-COLOR: #ffffff" SIZE=3D3 FAMILY=3D"SANSSERIF" FACE=
=3D"Arial" LANG=3D"0"><BR>
<BR>
</FONT><FONT  COLOR=3D"#000000" style=3D"BACKGROUND-COLOR: #ffffff" SIZE=3D2=
 FAMILY=3D"SANSSERIF" FACE=3D"Arial" LANG=3D"0">=C2=A0=C2=A0=C2=A0=C2=A0 Fou=
rth, the agent is cut off from client information by the career insurance ca=
rrier.</FONT><FONT  COLOR=3D"#000000" style=3D"BACKGROUND-COLOR: #ffffff" SI=
ZE=3D3 FAMILY=3D"SANSSERIF" FACE=3D"Arial" LANG=3D"0"><BR>
<BR>
</FONT><FONT  COLOR=3D"#000000" style=3D"BACKGROUND-COLOR: #ffffff" SIZE=3D2=
 FAMILY=3D"SANSSERIF" FACE=3D"Arial" LANG=3D"0">=C2=A0=C2=A0=C2=A0=C2=A0 The=
se four factors eventually come together and lead to increased replacement.<=
/FONT><FONT  COLOR=3D"#000000" style=3D"BACKGROUND-COLOR: #ffffff" SIZE=3D3=20=
FAMILY=3D"SANSSERIF" FACE=3D"Arial" LANG=3D"0"><BR>
<BR>
</FONT><FONT  COLOR=3D"#000000" style=3D"BACKGROUND-COLOR: #ffffff" SIZE=3D2=
 FAMILY=3D"SANSSERIF" FACE=3D"Arial" LANG=3D"0">=C2=A0=C2=A0=C2=A0=C2=A0 The=
 company=E2=80=99s best line of defense against replacement comes in the for=
m of other local agents who can be enlisted into trying to conserve the busi=
ness being replaced.=C2=A0 As the career agency system disintegrates, there=20=
are not as many local trainees available to do free conservation work, and t=
he remaining agents are more suspicious of management than ever before.</FON=
T><FONT  COLOR=3D"#000000" style=3D"BACKGROUND-COLOR: #ffffff" SIZE=3D3 FAMI=
LY=3D"SANSSERIF" FACE=3D"Arial" LANG=3D"0"><BR>
<BR>
</FONT><FONT  COLOR=3D"#000000" style=3D"BACKGROUND-COLOR: #ffffff" SIZE=3D2=
 FAMILY=3D"SANSSERIF" FACE=3D"Arial" LANG=3D"0">=C2=A0=C2=A0=C2=A0=C2=A0 Vet=
eran agents are more independent and less likely to spend money on stamps, p=
hone calls, etc. to try to conserve a departing agent=E2=80=99s business=20=
=E2=80=93 particularly since the compensation for a servicing agent is trivi=
al.=C2=A0 Moreover, remaining agents may themselves be close to leaving, giv=
ing them cause to be even less interested in protecting the insurer=E2=80=
=99s interests.</FONT><FONT  COLOR=3D"#000000" style=3D"BACKGROUND-COLOR: #f=
fffff" SIZE=3D3 FAMILY=3D"SANSSERIF" FACE=3D"Arial" LANG=3D"0"><BR>
<BR>
</FONT><FONT  COLOR=3D"#000000" style=3D"BACKGROUND-COLOR: #ffffff" SIZE=3D2=
 FAMILY=3D"SANSSERIF" FACE=3D"Arial" LANG=3D"0">=C2=A0=C2=A0=C2=A0=C2=A0 The=
 career agency system is dying quickly.=C2=A0 This means that the divorce be=
tween agents and career companies is almost final.=C2=A0 The custody battle=20=
now will be fought over the ownership of the clients.=C2=A0 Career company m=
anagement will have a fairly clear choice.=C2=A0 Companies can continue to p=
ay the original agent and use that agent to provide service to clients, or t=
ry to defend against increasing replacement activities.</FONT><FONT  COLOR=
=3D"#000000" style=3D"BACKGROUND-COLOR: #ffffff" SIZE=3D3 FAMILY=3D"SANSSERI=
F" FACE=3D"Arial" LANG=3D"0"><BR>
<BR>
Copyright =C2=A9 January 29 2001 The National Underwriter Company. All right=
s reserved worldwide<BR>
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