Smalltownagent
New Member
- 1
Sorry it's long!
I worked at an agency for many years where I was the only agent who was licensed and appointed to sell Medicare insurance. While employed with the agency the agent did receive 40% of the renewals and 50% new business for this book of business. Mind you there was no written agreement on their rights to this book of business, everything was written under my name and license and payments were made to me.
Along with being the only agent writing Medicare I was the commercial producer as well. While we were with a Captive agency, if we couldn't write it through them, we could place it outside. I had at least $450,000 in premiums with outside carriers.
After several years the agent, who is also my in-law retired from the captive agency suddenly. Mind you during the middle of the busiest time of my Medicare sales and many of my customers thought I had stopped doing insurance as well even though I reached out to everyone…. Small town and rumors get around. I was still in the building, but the agency number was disconnected due to being through the captive carrier and all signage was removed from the building. I put up a banner but that was paid for by me personally.
She stayed open for 2 months but then came to me stating she was leaving the industry all together. At that point I knew something was up and was working on a plan for myself. She came to me with the option of transferring the broker book of business then I pay her for it.
While I agreed with taking them over, I knew she didn't really have any other options and I was trying to help her out, there was never an actual written agreement on how much I would pay. This is where it gets difficult. I was under the impression I would pay for the renewals as they came in, since I was taking over after most of the large policies were renewed so the commissions for the next few months would be very little. 40% for all renewals as they came in and then after the first year, we would calculate the amount of premiums that renewed, and I would pay 30% of the renewals over the next 12 months.
However, she apparently had it in her mind I would just pay a monthly payment of 40% of what she told me the book was valued at…. Mind you, there was no documentation showing how much she made. She was going off the numbers she had from the year prior…. Where the Medicare numbers were much higher and one of the transferred carrier's was no longer writing in our state so most of those policies were going to be canceled at renewal.
I gave in and did agree to pay a higher monthly payment to them to try and keep the family peace. Again, no written agreement just a few back and forward emails. I paid over $3,800 monthly at first but did ask to lower to at least $2,500 6-months in because I was barely making enough to pay my own bills (remember I said the first few months of sales were very minimum…. Like $600 a month in premiums.) Thankfully my Medicare renewals were enough to keep me afloat. She did agree to go lower but only to $3,000 because she needed the money.
Fast forward to when the big policies were to renew and three major policies, who were all with the same customer did not renew. Now there were already issues with this customer, and I knew they would probably leave since they had several policies through the captive carrier that I was no longer associated with. I already did have conversations with her that I didn't think they were going to renew, and she said we would figure something out…. Her favorite line. She states that when purchasing a book of business that is a risk you take, however I would have never agreed to purchasing those policies since I knew they were most likely not renewed. And if the payments were as I thought they were going to be, this would not be an issue.
I haven't heard from her on discussing and we are already 13 months in. After renewing the numbers, she told me vs what I did it was $35,000 difference in premiums. Which would result in about $24,500 difference in what I would pay her according to her percentages she presented at first. I submitted everything to her, showing all my sales and the fact that I had paid her over $53,000 in the first 13 months.
She responded, stating she feels like I am being unfair and taking advantage of her. There is literally no signed agreement on anything, and I struggled monthly to pay her so much.
Am I wrong in stating I am going to pay less?
I worked at an agency for many years where I was the only agent who was licensed and appointed to sell Medicare insurance. While employed with the agency the agent did receive 40% of the renewals and 50% new business for this book of business. Mind you there was no written agreement on their rights to this book of business, everything was written under my name and license and payments were made to me.
Along with being the only agent writing Medicare I was the commercial producer as well. While we were with a Captive agency, if we couldn't write it through them, we could place it outside. I had at least $450,000 in premiums with outside carriers.
After several years the agent, who is also my in-law retired from the captive agency suddenly. Mind you during the middle of the busiest time of my Medicare sales and many of my customers thought I had stopped doing insurance as well even though I reached out to everyone…. Small town and rumors get around. I was still in the building, but the agency number was disconnected due to being through the captive carrier and all signage was removed from the building. I put up a banner but that was paid for by me personally.
She stayed open for 2 months but then came to me stating she was leaving the industry all together. At that point I knew something was up and was working on a plan for myself. She came to me with the option of transferring the broker book of business then I pay her for it.
While I agreed with taking them over, I knew she didn't really have any other options and I was trying to help her out, there was never an actual written agreement on how much I would pay. This is where it gets difficult. I was under the impression I would pay for the renewals as they came in, since I was taking over after most of the large policies were renewed so the commissions for the next few months would be very little. 40% for all renewals as they came in and then after the first year, we would calculate the amount of premiums that renewed, and I would pay 30% of the renewals over the next 12 months.
However, she apparently had it in her mind I would just pay a monthly payment of 40% of what she told me the book was valued at…. Mind you, there was no documentation showing how much she made. She was going off the numbers she had from the year prior…. Where the Medicare numbers were much higher and one of the transferred carrier's was no longer writing in our state so most of those policies were going to be canceled at renewal.
I gave in and did agree to pay a higher monthly payment to them to try and keep the family peace. Again, no written agreement just a few back and forward emails. I paid over $3,800 monthly at first but did ask to lower to at least $2,500 6-months in because I was barely making enough to pay my own bills (remember I said the first few months of sales were very minimum…. Like $600 a month in premiums.) Thankfully my Medicare renewals were enough to keep me afloat. She did agree to go lower but only to $3,000 because she needed the money.
Fast forward to when the big policies were to renew and three major policies, who were all with the same customer did not renew. Now there were already issues with this customer, and I knew they would probably leave since they had several policies through the captive carrier that I was no longer associated with. I already did have conversations with her that I didn't think they were going to renew, and she said we would figure something out…. Her favorite line. She states that when purchasing a book of business that is a risk you take, however I would have never agreed to purchasing those policies since I knew they were most likely not renewed. And if the payments were as I thought they were going to be, this would not be an issue.
I haven't heard from her on discussing and we are already 13 months in. After renewing the numbers, she told me vs what I did it was $35,000 difference in premiums. Which would result in about $24,500 difference in what I would pay her according to her percentages she presented at first. I submitted everything to her, showing all my sales and the fact that I had paid her over $53,000 in the first 13 months.
She responded, stating she feels like I am being unfair and taking advantage of her. There is literally no signed agreement on anything, and I struggled monthly to pay her so much.
Am I wrong in stating I am going to pay less?
