Shaking Hands With Strangers? Producer Agreements Need Revamping

While most insurance industry executives appropriately examine, negotiate and conduct due diligence prior to entering into a new business arrangement, they almost never think twice about signing a flimsy, one or two page contract with insurance brokers collectively valued at tens of millions of dollars. In essence, such contracts amount to nothing more than a handshake–with a stranger.

Most of todays producer agreements or notices of appointment in the insurance industry have become so boilerplate and perfunctory that they have lost their effectiveness. The legal relationship and obligations between insurance companies and brokers is typically so unclear in a producer agreement that both parties are overexposed and underprotected if a dispute arises.

Recommended For You

Want to continue reading?
Become a Free PropertyCasualty360 Digital Reader

Your access to unlimited PropertyCasualty360 content isn’t changing.
Once you are an ALM digital member, you’ll receive:

  • Breaking insurance news and analysis, on-site and via our newsletters and custom alerts
  • Weekly Insurance Speak podcast featuring exclusive interviews with industry leaders
  • Educational webcasts, white papers, and ebooks from industry thought leaders
  • Critical converage of the employee benefits and financial advisory markets on our other ALM sites, BenefitsPRO and ThinkAdvisor
NOT FOR REPRINT

© Touchpoint Markets, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more inforrmation visit Asset & Logo Licensing.