Is this good practise to pass by the comissions to client ? :arrow: :?
post edited as per the forums rule
Total Comments: 20
Posted: Tue Nov 25, 2008 10:32 am Post Subject:
How would I handle a client that said "If I don't get a rebate, I'm going to another agent" to me? I have, and will always advocate, that you tell that client to find another producer.
EXACTLY.
InsTeacher has hit the nail on the head, simply inform the client they'll have to find another agent.
Posted: Tue Nov 25, 2008 11:17 am Post Subject:
What if your prospect asks for a rebate and if you don't give discount, the prospect will get insurance from someone else, how do yuo handle this situation?
You just say, (nicely) '' Kick rocks fella" seriously who would want to do business with someone like this? I'd personally say, 'I'm sorry I don't do business that way, and any agent that does is breaking the law, if they'll break this one, logic follows they will break others...hope you find one, and hope you get all ''you think'' you're getting for your money"....seeeeeeeeeeeeeeeeee ya'
Posted: Wed Nov 26, 2008 07:31 pm Post Subject:
That type of person will also "better deal" you in a second. That means dealing with chargebacks and all sorts of other headaches...
Posted: Wed Nov 26, 2008 09:17 pm Post Subject:
You guys are right this is called Rebating. But it is not necessarily illegal or unethical. It is determined by state law and normal requires you to no discriminate who you rebate to. For example if you are rebating just for your family members or friends it would be illegal. if you rebate 10% of your commissions on all Lincoln policies for everyone, than it would be ok (again it is dictated by state insurance code). As far as the whole "what if your agent leave the business" question. I can not think of an instance where an agent would give up renewal comp because it is sooooo small. Most of the commission is made in the first year. I think it is up to every agent to decide if they want to rebate or not. I have seen it used effectively in a situation where the agent rebated a percent of his comp to a charity when members of the charity purchased life insurance with him for the charity. It all depends on how you want to run your business and what state your writing the business in. Just my 2 cents.
Posted: Wed Nov 26, 2008 11:09 pm Post Subject:
But it is not necessarily illegal or unethical. It is determined by state law and normal requires you to no discriminate who you rebate to.
Marpol, i have to disagree, on both points, first it is illegal in a lot of states, per ins. teacher, (trust me he knows what he's talking about), and sorry but it sure does 'smell' of unethical buisness practices to me. As far as the whole "what if your agent leave the business" question.
I can not think of an instance where an agent would give up renewal comp because it is sooooo small
How about if they die, quit or get fired..?? Here's my thing...if you rebate, to get the client, which what other reason could there be...you are stacking the deck and (only IMO) short selling both your product and any ability you have to sell the product by (again IMO)..undercutting others of that company to get the business...and still..if you sell me and my lincoln my policy at 10% less premium...then you quit next week are you telling me that company will continue on with that rebate? I don't think they will.
Posted: Thu Nov 27, 2008 01:36 am Post Subject:
i do not disput that it is illegal on most states (47 to be exact). As far as being unethical i am not so sure. is it unethical for Best Buy to sell items at cost to drive customers? is it unethical for a real estate agent to take 1% commissions instead of 3%. it may not be the norm and agents may not like it (myself included) but we do live in a free marketplace (although that could be debated also). if it is not illegal then it is up to the agent to decide how to run his or her business.
As fare as the agent dieing and what not. If you state that you are rebating in rebating state then the person that takes over your business must continue the rebating. What i was trying to say is that the renewal commissions (with a few exceptions) are very very small compared to the first year commission so there would be no intensive to rebate after the first year.
Posted: Thu Nov 27, 2008 11:25 am Post Subject:
Marpol you've made some good points.
But of the three (3) states that "allow" rebating the agent would still have to over come the clause in the agent's contract that specifically forbids rebating.
I do not know of any insurance company that "allows" rebating.
Can you name one (1) insurance company in the USA that allows rebating?
Posted: Thu Nov 27, 2008 11:39 am Post Subject:
if it is not illegal then it is up to the agent to decide how to run his or her business.
I agree with you totally...
What do you suppose the reason that 47 states, and apparently most if not all carriers forbid this?
Posted: Thu Nov 27, 2008 01:12 pm Post Subject:
thanks to all for your views on rebating and your heartfelt reply. :wink:
Posted: Mon Dec 15, 2008 02:03 am Post Subject:
It seems there are diverse views as to rebate is ethical or not. Probably it is good to revisit the relevant state laws, perhaps one may understand the reasons why rebate is not allowed.
Posted: Tue Nov 25, 2008 10:32 am Post Subject:
How would I handle a client that said "If I don't get a rebate, I'm going to another agent" to me? I have, and will always advocate, that you tell that client to find another producer.
EXACTLY.
InsTeacher has hit the nail on the head, simply inform the client they'll have to find another agent.
Posted: Tue Nov 25, 2008 11:17 am Post Subject:
What if your prospect asks for a rebate and if you don't give discount, the prospect will get insurance from someone else, how do yuo handle this situation?
You just say, (nicely) '' Kick rocks fella" seriously who would want to do business with someone like this? I'd personally say, 'I'm sorry I don't do business that way, and any agent that does is breaking the law, if they'll break this one, logic follows they will break others...hope you find one, and hope you get all ''you think'' you're getting for your money"....seeeeeeeeeeeeeeeeee ya'Posted: Wed Nov 26, 2008 07:31 pm Post Subject:
That type of person will also "better deal" you in a second. That means dealing with chargebacks and all sorts of other headaches...
Posted: Wed Nov 26, 2008 09:17 pm Post Subject:
You guys are right this is called Rebating. But it is not necessarily illegal or unethical. It is determined by state law and normal requires you to no discriminate who you rebate to. For example if you are rebating just for your family members or friends it would be illegal. if you rebate 10% of your commissions on all Lincoln policies for everyone, than it would be ok (again it is dictated by state insurance code). As far as the whole "what if your agent leave the business" question. I can not think of an instance where an agent would give up renewal comp because it is sooooo small. Most of the commission is made in the first year. I think it is up to every agent to decide if they want to rebate or not. I have seen it used effectively in a situation where the agent rebated a percent of his comp to a charity when members of the charity purchased life insurance with him for the charity. It all depends on how you want to run your business and what state your writing the business in. Just my 2 cents.
Posted: Wed Nov 26, 2008 11:09 pm Post Subject:
But it is not necessarily illegal or unethical. It is determined by state law and normal requires you to no discriminate who you rebate to.
Marpol, i have to disagree, on both points, first it is illegal in a lot of states, per ins. teacher, (trust me he knows what he's talking about), and sorry but it sure does 'smell' of unethical buisness practices to me. As far as the whole "what if your agent leave the business" question.I can not think of an instance where an agent would give up renewal comp because it is sooooo small
How about if they die, quit or get fired..?? Here's my thing...if you rebate, to get the client, which what other reason could there be...you are stacking the deck and (only IMO) short selling both your product and any ability you have to sell the product by (again IMO)..undercutting others of that company to get the business...and still..if you sell me and my lincoln my policy at 10% less premium...then you quit next week are you telling me that company will continue on with that rebate? I don't think they will.Posted: Thu Nov 27, 2008 01:36 am Post Subject:
i do not disput that it is illegal on most states (47 to be exact). As far as being unethical i am not so sure. is it unethical for Best Buy to sell items at cost to drive customers? is it unethical for a real estate agent to take 1% commissions instead of 3%. it may not be the norm and agents may not like it (myself included) but we do live in a free marketplace (although that could be debated also). if it is not illegal then it is up to the agent to decide how to run his or her business.
As fare as the agent dieing and what not. If you state that you are rebating in rebating state then the person that takes over your business must continue the rebating. What i was trying to say is that the renewal commissions (with a few exceptions) are very very small compared to the first year commission so there would be no intensive to rebate after the first year.
Posted: Thu Nov 27, 2008 11:25 am Post Subject:
Marpol you've made some good points.
But of the three (3) states that "allow" rebating the agent would still have to over come the clause in the agent's contract that specifically forbids rebating.
I do not know of any insurance company that "allows" rebating.
Can you name one (1) insurance company in the USA that allows rebating?
Posted: Thu Nov 27, 2008 11:39 am Post Subject:
if it is not illegal then it is up to the agent to decide how to run his or her business.
I agree with you totally...What do you suppose the reason that 47 states, and apparently most if not all carriers forbid this?
Posted: Thu Nov 27, 2008 01:12 pm Post Subject:
thanks to all for your views on rebating and your heartfelt reply. :wink:
Posted: Mon Dec 15, 2008 02:03 am Post Subject:
It seems there are diverse views as to rebate is ethical or not. Probably it is good to revisit the relevant state laws, perhaps one may understand the reasons why rebate is not allowed.
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