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Re: UNUM- EXAMPLE OF BROKERED INSURANCE

Posted by Nathan on November 18, 2002 at 18:37:52:

In Reply to: UNUM- EXAMPLE OF BROKERED INSURANCE posted by Howard on November 18, 2002 at 17:29:47:

: Who knows about the LTC claims problems with the company? After watching the 60 minutes special, I think this presents a strong case for knowing your agent, who he/she works for, how many companies they represent, and who has your best interests in mind. Who else could some of these disability holders turn to besides the claims department of the insurer? The independent agent who sold the policy? It's true, bigger is not better, and an independent agent cannot always provide a true objective value or accountability anymore than a captive agent could.

: You are right in saying that both a captive agent and an independent broker are equally at risk when a carrier with whom they’ve represented turns its back on its fiduciary responsibility. However, if you were an agent who sold exclusively for UNUM, you would have some real trouble on your hands. An independent broker must depend on the independent rating agencies and trust the companies filed financial statements when determining which products to sell to their clients. At least and independent agent does not have all his/her "bread in one basket." A captive agent could lose his/her entire book if their company folded, or had some regulatory problems. If this captive agent were to learn from such an incident he/she would become independent to protect themselves and their future clients from future company failures. After all, we are in the business of spreading risk, NOT concentrating it!!! Unfortunately both captive and independent agents lose with our clients when a carrier fails to meet its responsibility. And, we are truly both at risk and at the mercy of the carriers filed statements because none of us are privy to company managements current and future decisions. We should all learn to read financial statements very closely and make it our responsibility to know a lot about who is running our chosen companies... Good luck!

Follow Ups:

Re: UNUM- EXAMPLE OF BROKERED INSURANCE : : Who knows about the LTC claims problems with the company? After watching the 60 minutes special, I think this presents a strong case for knowing your agent, who he/she works for, how many companies they represent, and who has your best interests in mind. Who else could some of these disability holders turn to besides the claims department of the insurer? The independent agent who sold the policy? It's true, bigger is not better, and an independent agent cannot always provide a true objective value or accountability anymore than a captive agent could. : : You are right in saying that both a captive agent and an independent broker are equally at risk when a carrier with whom they’ve represented turns its back on its fiduciary responsibility. However, if you were an agent who sold exclusively for UNUM, you would have some real trouble on your hands. An independent broker must depend on the independent rating agencies and trust the companies filed financial statements when determining which products to sell to their clients. At least and independent agent does not have all his/her "bread in one basket." A captive agent could lose his/her entire book if their company folded, or had some regulatory problems. If this captive agent were to learn from such an incident he/she would become independent to protect themselves and their future clients from future company failures. After all, we are in the business of spreading risk, NOT concentrating it!!! Unfortunately both captive and independent agents lose with our clients when a carrier fails to meet its responsibility. And, we are truly both at risk and at the mercy of the carriers filed statements because none of us are privy to company managements current and future decisions. We should all learn to read financial statements very closely and make it our responsibility to know a lot about who is running our chosen companies... Good luck!

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