Bobos Field Force Column Resonates With Producers

To The Editor:

Jack Bobo was right on the money in his column, “How To Destroy A Field Force–And Perhaps A Company As Well,” in the Jan. 13, 2003, issue of National Underwriter.

I spent 14 years with Mutual Benefit before the ship went down. In the late 1980s, an attorney was brought in from Providence, R.I., as an executive vice president to work over the field force with contract changes and administrative changes that were a negative impact to a fantastic agency force.

This attorney had no experience in the life insurance business and he decided very quickly that we made too much money, that our contracts were too rich and that we should become “indentured servants.” He was in the process of changing the contract so that the company owned our files, our clients and almost everything we did. Upon termination, they had the right to come to our office and take our files.

You can imagine the tremendous dissension that this caused in the ranks. Fortunately for most of us, none of this was done in time for the ultimate rehabilitation. To this day we still own our files and we are paid commissions. Its probably the only good thing that came out of rehabilitation.

The agency system is fantastic, but one of the problems is that many of the executives and managers who oversee it have never filled out an application. They dont know what we do and in many instances they really dont care. I guess in the long run they forget who creates the dollars.

Jack is absolutely correct on this one. The business overall is changing and in some instances not for the better.

Eugene W. Tuite, CLU
Stuart Life & Pension Associates
Hawthorne, N.J.

To The Editor:

In response to and in support of Jack Bobos column in the Jan. 13 issue, I should like to add another vehicle, which, in my view and the view of many others, is leading to the loss of the loyal field force and, ultimately, may lead to the demise of some carriers. I refer to the practice of coercing producers to use “in-house” products or suffering a reduced commission.

I have been in the business for nearly 38 years and, like anyone who has been around for any length of time, am well aware that no company always provides the product or the underwriting necessary to do the job properly.

Clearly, in these situations, the companies are telling us that the companys interests come before those of the client. My experience is that this problem comes to the fore when we deal with products provided under the aegis of the “in-house” broker-dealer (equity-based products).

I realize that placing business outside the “in-house” broker-dealer involves an added cost and that a small reduction in commission might be justified, but when the concession results in the company paying only 40% of the broker-dealer concession to the producer, something is very clearly wrong.

I am personally aware of several quality producers who have left a major carrier in order to:

a. be properly compensated;

b. obtain quality service; and

c. obtain the freedom to use those products deemed appropriate to the situation.

Sy Black, CLU
Anaheim, Calif.


Reproduced from National Underwriter Edition, March 3, 2003. Copyright 2003 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.