Todays Date: Feb 1, 2015
Alert — New Important Update — 11/18/2014
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
I Shake My Head at What Insurance Companies have Become! Click this link to read how one of our members thinks insurance companies have changed in the last 20 years. He also presents you with an article Harvey Pearce wrote back in 1998 to prove his point. 11/12/2014
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
2013 American Family Corporate Salaries! Click this link to see the salaries of all officers and employees who made over $250,000 in 2013. Although some of the Top Ten officers took decreases, the top two officers, Jack Salzwedel and Daniel Schultz managed to pull off hefty increases. This is disappointing as one would think leaders should set examples for others. These increases disappoint agents who continue to suffer with decreased commissions and terminations, and also employees who are being terminated! 5/14/2014
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
How Allstate Plans to Outflank its Online Rivals! Allstate's Esurance will begin bundling Auto to Home coverages which most Allstate agents feel will impede even further their ability to sell and be competitive with their Allstate products. For another link about how Allstate's captive agents are suffering as a result of Allstate's direct marketing company, Click Here! 11/18/2013
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
Homeowners have Stormy Relationship with Adjusters! The adjustors the news media is talking about belong to American Family. This kind of news is not good news for AmFam agents if you are trying to sell policies! 10/4/2013
American Family's 2012 Annual Report! For your convenience, here is a link to Am Fam's annual report. You can compare to American Family's 2011 Annual Report which can be found below! 9/4/2013.
Judge's decision allows class action to move ahead! As was announced earlier, (see below "Another Class Action Filed Against AmFam") a class action complaint was filed against American Family in February, 2013, asserting that the Plaintiffs were all employees as defined by ERISA rather than independent contractors as the agent contract reads. American Family responded to the complaint and then asked for the case to be dismissed. On August 9, 2013, Judge Donald C. Nugent made his decision and denied AmFam their request to dismiss. The class action will now move ahead! 8/18/2013
The Summer 2013 NAAFA Report! If you haven't gotten a hard copy already, here it is on line. NAAFA is already getting responses to many of the articles. Let us know what you think by sending your thoughts to NAAFAwest@comcast.net! 8/17/2013
Three Insurance Companies Placed in Liquidation in Illinois and Lumbermens Mutual Casualty is one of them. Does that name sound familiar? Didn't AmFam just buy part of them a short while ago? Interesting??? 5/25/2013
American Family Auto Ins Medpay Class Action Settlement: Not another class action! Well, the original class incident involves a 13 year old case, but the agreement to settle is new. Read about it here. 4/20/2013
ANOTHER CLASS ACTION FILED AGAINST AMERICAN FAMILY INSURANCE COMPANY On February 28, 2013, a class action complaint was filed in US District Court, Northern District of Ohio, Eastern Division. The suit claims that American Family has violated ERISA laws by treating their independent contractor agents as employees. Plaintiffs Walid Jammal and Dana LaRiche have filed this claim on behalf of themselves and all others similarly situated. 3/22/2013 CLICK HERE TO READ AMFAM RESPONSE TO JAMMAL AND LARICHE COMPLAINT. Posted 6/3/2013
Class action filed against American Family. “Insurance Company Fleeced Us!” A Minnesota couple is suing AmFam in a class action for what the couple says are excessive charges on homeowner replacement costs. 2/18/2013
Evidently Jack Salzwedel, AmFam CEO, is not very popular with his employees. He gets only a 45% approval rating and only 47% of the employees recommend this company to a friend! Read more here at The Glass Door. 9/15/2012
Do Insurance Brokers have to Offer the Cheapest Coverage? Insurance brokers should be cautious in advertising their abilities to obtain the lowest cost insurance for their insureds, Learn why. 8/25/2012
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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