Fired Agent Opposed Credit Scoring

An influential Allstate agent who testified against insurer useof credit scores in underwriting saw his contract terminated a fewweeks later, although Allstate said the two events areunrelated.

John F. Bryant, whose J&B Bryant Agency is in Hammond, La.,had testified in early March before the Maryland House EconomicMatters Committee on House Bill 521. The bill seeks to extend theexpiration date of statutes prohibiting insurers from, among otherthings, denying coverage to consumers on the basis of their creditscores.

At press time, the bill had passed both the Maryland House andSenate, and had been forwarded to Gov. Parris S. Glendening for hisconsideration.

Mr. Bryant told National Underwriter that he believeshis appearance before the Maryland lawmakers was one of the reasonsbehind his termination. He said that he did not identify himself asan Allstate agent.

However, he did tell the lawmakers that he was representingAllstate agents in his capacity as national board member of theNational Association of Professional Allstate Agents, a Canton,Mich.-based group, and as legislative chair of the Coalition ofExclusive Agent Associations, a Baltimore group.

But what probably sealed his fate, he said, was his response toa legislator's inquiry about whether he knew of any insurer thatrequires agents to run a prospective client's credit reports beforegiving a quote or even checking the client's motor vehicle record.He said he identified Allstate as one such insurer.

In an April 3 letter to both the Maryland House Economic MattersCommittee and the Senate Finance Committee, NAPAA reported that agroup of Allstate “operatives,” along with a hired police officer,went to Mr. Bryant's office on April 2 to inform him about thetermination. Mr. Bryant said that the “crew” included threemanagers, a human resources staffer, two telephone technicians anda computer technician.

As for the purpose of the paid police officer, Mr. Bryant saidthe Allstate people told him they wanted no “confrontation.”

Although the telephone and computer systems were removed fromMr. Bryant's office, he refused to give up his client files.“According to the [Louisiana] Department of Insurancemarket-conduct people, I'm responsible for maintaining those filesfor five years,” he explained.

The official termination letter presented to Mr. Bryant statedthat the reason for the action was his “failure, as key personunder the Agreement, to maintain a professional and business-likerelationship” with Allstate, as well as his agency's “failure tomeet business objectives established” by Allstate. The insurer'srepresentatives declined to give a clearer explanation, said Mr.Bryant.

While confirming that Mr. Bryant and his agency “are no longerauthorized to do business on behalf of the Allstate Company,” MaryAlice Horstman, director of media relations for the Northbrook,Ill.-based Allstate, declared that Mr. Bryant's vocal opposition tocredit scoring had “absolutely nothing to do with his termination.”She declined to go into the specific reasons for the terminationdue to Allstate's policy against discussing the details aboutcontractual relationships with its agents.

But speaking generally, Ms. Horstman did state that the reasonwas the “failure to achieve the business objectives established bythe company and agreed to by the agency,” as well as Mr. Bryant's“failure to maintain a professional and business-like relationshipwith the company.”

When pressed to define “maintaining a professionalrelationship,” Ms. Horstman stated that Allstate expects its agentsto act in good faith in the performance of their contractualobligations, and “not to participate in any activities that damagethe Allstate brand, the Allstate reputation in the marketplace, orits relationships with its customers, its agencies or itsemployees.”

In Mr. Bryant's view, “company objectives” consisted ofproduction growth and loss ratio, both of which he said he hadachieved.

Speaking generally, Mr. Horstman said that Allstate has basicbusiness objectives for achieving growth that are based onAllstate's property-casualty, life, and savings business, as wellas profitability. “Our intent is to assist the agent in becomingsuccessful by meeting these business objectives,” she said.“Several factors are taken into account if an agent is deficient inany area, and that would include if there are market conditionchallenges, or something significant has happened in anagency.”

Mr. Bryant said that the only Allstate objective he did not meetwas life insurance sales quotas, which he believes are illegalunder local law.

Rod Guilmette, editor of the NAPAA newsletterDirectExpress, said that Mr. Bryant was a driving forcebehind legislation prohibiting insurers from imposing life andhealth sales quotas in Louisiana as a condition for the authorityto sell property-casualty insurance. Mr. Bryant said he is workingon having similar legislation introduced in seven other states.

The NAPAA letter said that one of Allstate's business objectivesis “to impose credit scoring on the American people.” NAPAA wrotethe Maryland legislators that “the insurance carriers don't wantyou to hear the agents' voices because no one knows better thanagents how credit scoring affects their customers.” By terminatingMr. Bryant, Allstate drives home the point to the rest of theagents that they must not “reveal the truth about credit scoring,”NAPAA said.

Mr. Bryant said he has spoken out against credit scoring inseveral states, including Georgia, Michigan, Montana, Texas andWashington. He also has been advocating for legislation imposing“for cause” termination requirements on insurers seeking to breakcontracts with agents.

Mr. Bryant said he had learned that at a meeting in Allstate'sFlorida home office the week of March 25, “management informed theagents who were there that they were looking at ways to separatethe troublemakers from the company and that they would beseparating all of them.”

Mr. Bryant speculated that he was probably at the top of thatlist due to the fact that he kept agents around the countryinformed of what Allstate “was doing wrong.” This, he said, waspart of his duties as national board member of NAPAA and aslegislative chair for the Coalition of Exclusive AgentAssociations. The CEAA functions as an umbrella organization forassociations of exclusive agency producers, such as NAPAA, Mr.Guilmette explained.

Mr. Bryant not only has pushed for legislation against creditscoring, Mr. Guilmette noted, but also for just-cause terminationof captive agents. “He's a real workhorse,” said Mr. Guilmette.

Mr. Guilmette conceded that at least one amendment to theAllstate appointment contract contains “verbiage” indicating thatits agents may not speak with the media or legislators withoutjeopardizing their position. It is unclear, he said, how andwhether such an edict can apply to non-Allstate activities orinformation. “It's difficult for an agent to step through thisminefield,” Mr. Guilmette observed.

But the ability to terminate contracts at any time for any or noreason “is how Allstate controls the agency force,” he said. Healso observed that this is generally the type of approach taken byinsurance companies toward their captive agents, “although Allstatedoes seem to be the most ferocious about it.”

He stressed that whatever Mr. Bryant's future professional plansare, he will continue as an NAPAA board member and as “a voice forthe agents.” For its part, NAPAA is consulting its attorney for itslegal options in Mr. Bryant's case, Mr. Guilmette said. NAPAA alsois notifying as many member agents as possible “that theirchampion, their standard-bearer has been terminated,” he said.

Reproduced from National Underwriter Property &Casualty/Risk & Benefits Management Edition, April 15, 2002.Copyright 2002 by The National Underwriter Company in the serialpublication. All rights reserved.Copyright in this article as anindependent work may be held by the author.