Todays Date: May 26, 2016
Alert — New Important Update — 11/18/2014
Noncompete Agreements a Tricky Target For Obama Administration is an interesting article revealing the status of non-competes in various states and the views of this administration. We all know what the non-compete in our contracts has done to the rights of consumers (our clients). The non-compete is designed, we believe, to protect only the company. The agent's right to work is somewhat jepordized during the non-compete, and most certainly the right of the consumer to pick the agent of his choice is restricted during the non-compete period. This is a good issue to watch 5/17/2016
JUDGE CERTIFIES CLASS ACTION United States District Court Judge Donald C. Nugent, (for the Northern District of Ohio Eastern Division) on 3/2/2016, certified the Class Action case of Walid Jammal (Plaintiffs) v American Family Insurance Group. (Defendants). Plaintiffs filed this class action on February 28, 2013 against American Family Insurance Company alleging that American Family improperly classifies its agents as independent contractors when actually they are employees because of the amount of control the company maintains over nearly every aspect of the agents' business operations. 3/3/2016
American Family Reports Strong 2015 Results. Things evidently went well for AmFam in 2015, according to this article. Does this mean upper management will again take huge salaries and bonuses? Or does it mean the policyholders will finally get some relief in lower premiums? Well, what we do know is that if the field agents benefit at all, it will be because they worked extra hard to sell products that are some of the highest in the market place. With the windfall received by the Company from terminating huge numbers of agents because of their lack of production, it's no wonder AmFam can report a 'strong' 2015! 3/3/2016
Top 20 Claims Satisfaction Rankings. You might be interested to know that American Family ranked 11th in claims satisfaction ranking among the top 20 companies listed here. Also interesting is the fact that the overall claims satisfaction score tumbled for the first time in 5 years. Read it here! 3/2/2016
MN: Exams of 16 Life Insurers Find $174M in Unpaid Benefits, So Far! A great example of our MN Insurance Commissioner's outstanding work. NAAFA has felt for a long time that insurance commissioners need to make insurance companies more accountable. To think that beneficiaries can't be located in today's world of advanced computer availabilities is unbelievable. Sure hope our favorite insurance company's name doesn't appear on their list! 2/16/2016
Could Cyber Kill the Insurance Industry? ND Insurance Commissioner Adam Hamm thinks it coould. Read and listen to this clip as to why he thinks it might happen. Interesting to say the least! 1/19/2016
The Independent Contractor Guide and How to Find Work as an Independent Agent It's no secret that AmFam is waving goodbye to many of their long-time, outstanding agents. It's also no secret that more and more NAAFA members are independent agents either working for aggregator organizations or else securing contracts by themselves. One of the writers below makes reference to the fact that "independent insurance agents are the freelancers of the insurance world" and the other article writer seems to agree. The following links might be helpful to anyone seeking to truly go independent: 1/7/2016
The 2015 Fall-Winter NAAFA Report is now available under “NAAFA Report Online!” We thank those who have contributed articles and other information. Let us know your thoughts on this interesting and pertinent issue. 12/29/2015
Best, Worst States for Insurance Regulation: Many have expressed concern for a long time about how good a job insurance regulators do in policing the activities of insurance companies and in truly listening to the complaints of consumers. R Street tries to answer certain questions with its analysis (see article) but one of the important questions that might have been asked is "How free are consumers to choose the insurance agent they want?" Be sure to scroll down in the article and read the actual 2015 Insurance Regulation Report Card. 12/8/2015
5 Ways Google Insurance will Disrupt the US Auto Insurance Industry Although only in CA so far, guess what insurance company is included in one of the nine that Google quotes from? The General!!! We can probably assume it won't be long till Google is offering this price comparison program in the rest of the states. Watch out! 11/23/2015
The Case for Independent Agency Optimism Recent research indicates that perhaps the independent agents offering choices (suppose this eliminates the independent agent NOT offering choices??) doesn't really have to worry so much about his future as some (captive) companies are proposing. Read why this writer thinks so. 11/5/2015
How Independent Agents Can Give Customers What They Expect: What customers expect may surprise you. Be sure to read the 6th paragraph carefully and then think over whether you agree with this finding and whether you're prepared to provide this kind of service. Interesting!! 9/13/2015
9 Investigates: Insurance Companies Cutting Corners on Safety. This is quite a report on how certain insurance companies order repair shops to 'cut corners.' Does it happen where you are? 8/27/2015
A Rich Financial Realm Run Almost Without Oversight: Mutual insurance companies are supposed to be responsible to their policyholders, but are they really? Massachusetts Mutual Life and Liberty Mutual are both trying to live down gossip about how they actually abuse their policyholders. Their CEOs are rewarding themselves with huge annual pay packages, luxurious offices where the company spent $4.5M to renovate them, and several private jets for the travel of their family and friends. Who polices them? You won't want to miss this article. 8/25/2015
The FedEx Driver Who Sued and Won: For those interested in a case not completely unlike Jamal vs American Family (class action) please read this catch-up article. The dispute is whether the FedEx drivers are employees or independent contractors. 8/25/2015
Companies must Report CEO-to-Worker Pay Ratio under new SEC Rule: Oh, oh!! This should prove interesting since one of the hottest topics of discussion lately has been CEO compensation. One would disparage 'cooking-the-books' to justify one's salary, wouldn't one? 8/6/2015
Labor Dept's 6-Part Test for Classifying Employees, Indep. Contractors: New guidelines for classifying workers under the Fair Labor Standards Act (FSLA) has been issued by the US Dept of Labor. As our readers know, the question of whether AmFam agents are independent contractors or employees is a hot issue right now. The Insurance Journal has summarized this for you, but the original memo can be found at http://www.scribd.com/doc/271748996/Labor-Department-Memo-on-Classification-of-Employees-v-Independent-Contractors. 7/20/2015
24 Car Insurance Companies Ranked on Shopping Experience Satisfaction It's sad to see AmFam 4th from the bottom, but that's where we landed. There's no doubt about it, the independents make the shopping experience much more pleasant. Of course, we do understand from the report that drivers who find cheaper rates report higher satisfaction, so is it any wonder AmFam's at the bottom? And yes, agent are getting fired because they can't sell enough! 5/20/2015
2015 American Family Corporate Salaries - Top Ten Officers Once again, you can click this link to see the 2014 salaries of all American Family officers and employees who topped $250,000 in salary and bonuses. Be sure to read the Spring 2015 NAAFA Report for a comparison of the top Farmers Corporate Salaries to the top AmFam Corporate Salaries. Very interesting!! If you haven't received a hard copy of The NAAFA Report, you should be able to view it soon on this website by clicking the blue tab (NAAFA Report Online) in the left column of this Home Page. 5/13/2015
2015 American Family Corporate Salaries - Complete List!
Top 10 Employment Discrimination Claims NAAFA often hears from agents who feel they are suffering from some type of company retaliation. Many claim to be hesitant to express concerns or opinions on most matters because of fear of retaliation. Well, guess what? Claims alleging retaliation against an employee for involvement in a complaint reached a record high in fiscal year 2014. This is an interesting read. 2/9/2015
How States Rate on Insurance Regulation, ‘A’ to ‘F’: The 2014 Insurance Regulation Report Card might prove interesting to some of you. It tells how judges rated each state insurance department on various topics. Most interesting was how fraud was policed. We noted that Wisconsin’s greatest weakness is in the area of fraud. (Page 32 of the report card.) Click here to reference the Report Card. 1/9/2015
MN Supreme Court Rules Against Ins. Co. in Key Storm Damage Dispute: You guessed it. That insurance company is American Family. Agents have been sympathizing with insureds for quite some time when the company decided to replace only the damaged parts of siding or roofs on their hail damaged homes. But the MN Supreme Court ruled against AmFam on Wednesday, December 17, 2014. The ruling states that insurers must match colors even if that means replacing undamaged siding and shingles. Attorneys who represented the homeowners said this could set a precedent statewide. A win for the consumer at last! 12/18/2014
MORE AMERICANS RETIRING LATER THAN THEY EXPECTED ! It is entirely possible that the AmFam agents who found themselves terminated before they'd planned or agents who were forced to resign have added to these statistics. According to research by the Employee Benefit Research Institute (EBRI), there has been a big increase in later-than-expected retirements following the 2008-2009 recession. EBRI found that people who have a retirement plan tend to retire closer to when they expected, compared with those without a plan. NAAFA always recommends that agents develop a plan to retire. As self-employed workers, we have no formal pension or 401K, but many have set up SEP/IRAs which, if faithfully funded to the fullest, can really help lessen the need to continue working past what you'd expected. 11/18/2014
American Family Insurance Fosters Start-ups through Venture Capital Arm! American Family plans to spend about $50M on helping 'entrepreneurs' start new businesses. Wonder if they'd ever consider giving some of this to agents who need the help. Interesting article you won't want to miss if you wonder where the money goes that AmFam is saving by terminating so many agents. 10/10/2014
10 Things to Know About Auto Insurance! Although this article recognizes that AmFam is one of the 10 largest insurers in private passenger auto, it states that State Farm, Geico and Allstate lead the way and together these three companies make up 38.8% of the market share. The article contains lots of other interesting statistical information you won't want to miss. 9/12/2014
If You Have Poor Credit, You May Pay Nearly Double for Home Insurance! This article shows by state, the average percentage that homeowner's insurance increased since the use of credit scores was instituted. No wonder it is hard to sell anything these days. Enlarge the chart on this page and see how rates in your state have increased. 8/18/2014
AssureStart in Washington names Zenner Chief Marketing Officer As the company moves on ahead with their plans to expand direct marketing, they also appear to be moving on ahead with their termination field agents. As was stated earlier, AmFam evidently feels they have little need field agents anymore. NAAFA continues to hear every day from agents who have just been terminated. Yes, the writing is on the wall. 8/8/2014
Reinsurer Wants $100M Back After 'Falsified' Storm Report! That's right….$100M back from American Family, ISO Services, and AIR Worldwide Corp, who are accused of falsifying a report by backdating it to hide the original bulletin. The Mariah's lawsuit accuses AIR and ISO of breach of contract and American Family of unjust enrichment, tortious interference with contract and conversion. Could this be a conspiracy to profit from the reinsurer? Read about it here. 7/10/2014
AssureStart Expands Online Small Business Insurance Sales to Three More States!" As the agent who reported this to NAAFA said, "Talk about another nail in the coffin for agents! Why doesn't AmFam make it easy for their agents to sell?" Yes, it seems the company loves to take business away from their own. This is so easy to figure out….they get the business anyway, but without paying the agent any commission. Sad! 6/21/2014
Agents React to Walmart, Overstock in Ins: "We aren't Dead or Dying, We are Evolving!" The discussion continues about the future of the insurance agent. Read how both sides argue to defend their positions. Once again, it seems AmFam is taking the side of the McKinsey Report by moving toward having fewer and fewer agents. But the Big "I" has some huge rebuttal arguments. Agents, we're not dead yet! 6/13/2014
Has Online Shopping for Auto Ins. Peaked? If this report is true (numbers of people shopping for auto insurance on line is dropping) then one would have to wonder whether AmFam's plan to rid itself of so many agents is really a wise idea. Read it here and decide for yourselves. 5/20/2014
10 Best Companies for Homeowners' Claims Experience!! It doesn't make the AmFam agent's job easier when we read that the company we sell for ranks #15 in homeowner customer claim satisfaction. AmFam ranks lower than nearly all our captive competitors. We're lower than Nationwide, Farmers, Liberty Mutual, Allstate, and State Farm, to name a few. Why? Why is this happening? For sure, it is not the agents' fault this time. Agents take a lot of blame for a lot of things, but this problem lands back in the lap of the company. Wouldn't it be nice if we could set a quota for AmFam….become #10 within 6 months or you're fired? 3/1/2014
Insurance Executives Hitting the Jackpot! It's nearly that time of year again when we get anxious to see how much the AmFam Executives will award themselves for the 'great job'(tsk,tsk) they have done this past year. We're told AmFam has been run well this past year….having seen a premium increase. But….what about retention? What about production? If there's been a good year it must be at the expense of somebody, right? Think "agents!" How many agents have lost their jobs at AmFam? How many have lost premiums in their agencies? What about policy count? How many agents have been downright discouraged, threatened, and ready to give up? Bonus time? We think not! 2/18/2014
Why McKinsey's Prediction of Demise of Independent Agents is 'Dead Wrong'! If you haven't been watching these comments by the independents regarding the controversial McKinsey Report, McKinsey Report you are not keeping up with what's going on in the insurance world. (AmFam uses McKinsey as a consultant.) Here is quite an interesting response to the McKinsey Report just hot off the press. You need to read it carefully. It may open your eyes to the security of your own future. 10/29/2013
12 Agents' Thoughts on their Futures in the Industry! 12 independent agents sound off about The McKinsey Report ... (that their futures are limited). AmFam agents need to sound off, too. Changes being made (by AmFam presumably as a result of their agreement with the McKinsey Report,) are causing heartache and great inconvenience for AmFam agents. 10/17/2013
Top-Ranked Carriers Build Agent Satisfaction into Culture! Which consultant should AmFam have hired? Mckinsey or Deep Customer Connections? (Remember, they hired McKinsey!!) Deep Customer Connections, we're told in this article, has a niche focus on building a better relationship between carriers and independent agents. This idea seems to be in direct contrast to the philosophy of the McKinsey group. Read it for yourselves….you decide. 10/17/2013
McKinsey to Agents: Adapt or Find Another Line of Work! Well, this article has caused a lot of uproar with insurance agents across America, and it's not hard to see why. McKinsey compares today's insurance agents' futures to those of yesterday's travel agents…..almost gone! What's your opinion? Is AmFam drinking McKinsey's Kool-Aid? 10/16/2013
FreeAdvice.com is a site where customers can post their thoughts regarding their insurance companies. See what customers are saying about American Family. Scroll down to get the most recent comments. 11/15/2010
Want to “vent” about your job or company? www.jobvent.com is the place to do it. Read what others are saying, also. 7/23/2010
Did you know copiers have hard drives?
Information that you copy could fall into the hands of the wrong people, particularly the company you lease your copier from. Agents BEWARE! 5/16/2010
What Every Agent and Customer Should Know About Clue Reports! 1/23/2010
IRS Private Letter Rulings!
American Family agents, and other captive agents, are considered independent contractors by the IRS. Since the IRS issued Private Letter Rulings for most of the captive companies, captive agents who filed SS-8’s found their appeal rejected immediately because of these Private Letter Rulings. Very few agents have actually read the 111-page Correspondence between AmFam and the IRS, nor have they read the summary American Family Private Letter Ruling so we are posting both of them for you. You will be interested to read about how little ‘control’ the company is supposed to have over the operation of your agency.
Information in an Allstate Private Letter Ruling states that an independent contractor agent has an “economic interest” in the customer list, and agents will realize this ‘interest’ when they are either paid by a 3rd party for their business OR the agent receives termination benefits based on a formula designed to equal a fair market value of their accounts. [Paragraph 6 under Independent Contractor Phase, (Allstate Ruling)]
This presumes a fiscal value which should allow an agent to claim capital gain when paid termination benefits. Even more interesting is the fact that AmFam issued a document that says “Formerly called Extended Earnings, the name was changed to “Termination Benefits.” These are payments made to the former agents not to compete.” (See SECA Kit)
The non-compete clause applies for one year.The AmFam contract does not state that a customer list cannot be used after the one year because logic would dictate that you’d have to have in your possession a customer list in order to begin competing after the one year.
The 20 Common Law Factors of a Perfect Independent Contractor Relationship
Deliberately Misclassified? What Allstate Has In Common With FedEx!
This article appeared recently in the Allstate Agent Association’s Winter 2008/2009 issue of the FOCUS. The article deals with the ongoing question of whether captive agents are independent contractors or employees. We suggest you read this article carefully. You might find you are able to substitute American Family’s name each time you see Allstate’s name. Quoted from the article, “If it Quacks Like A Duck, It’s Probably a Duck.” 3/14/2008
Captive Agents, the Forgotten People!"
NAAFA is again honoring agents’ requests to remain anonymous out of fear of retribution regarding this article, but we think this is perhaps one of the best letters we have received which summarizes the position and fate of all captive agents in America. You won’t want to miss this! 2/28/2008
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