NU Online News Service, Sept. 30, 3:26 p.m. EDT
An agent's association said it believes certain insurance companies are demanding confidential information about independent agents' books of business so it can bypass them on sales.
The Professional Insurance Agents of Connecticut, New Hampshire, New Jersey and New York State Inc. said carriers have requested "unusually detailed information" concerning producers' books of business.
The requests, seeking data on dealings with rival companies, are so detailed, said PIA, that it fears the companies are seeking to circumvent the agents and sell policies direct to customers.
It called the requests a significant breach of the independent agent-carrier relationship.
"It's logical for an insurance company to want information regarding its own products," said Diane Fowler, executive director of PIACT, PIANH, PIANJ and PIANY. "But details on the rest of the products offered by an agency from other companies are privileged information."
She said, "Not only would this constitute a breach of client privacy, but also, it causes agents to wonder about the reasoning behind harvesting this contact information."
Ms. Fowler noted, "Agents acquire policy information at their own expense to service accounts and renew coverage for their customers, with virtually all contracts between independent agents and companies declaring the agent as exclusive owner of this information.
"The idea that insurance companies might poach business from their most loyal salespeople is a frightening testament to the current difficult economic times."
Matthew Guilbault, director of government and industry affairs for PIA, said the issue surfaced when close to half a dozen agents contacted the association's resource center seeking advice on how to deal with a carrier's request.
Up to five regional carriers made the request in the form of one- to two-page discovery work sheets requesting detailed information on the agent's commercial and personal lines business including premium volume and clients' e-mail addresses.
Mr. Guilbault declined to name the carriers or the agents involved, except to say that all of the requests were in New Jersey.
He said the carriers did not offer any reason for the information request, but it does put agents in an uncomfortable position to refuse the request.
"We want to nip this in the bud before it becomes a bigger issue," said Mr. Guilbault.
He said while the request for the information is not technically illegal, it could be illegal for an agent to give the information.
By law, agents are forbidden to divulge information that is not meant for a third party. Besides that, it is a compromise of the principle that the agent is the owner of his or her book of business, said Mr. Guilbault.
While no legal or other action is being contemplated at this time against the carriers, Mr. Guilbault said PIA has informed the national association of this in order to get the word out to its other state members and is publicizing the carriers' requests.
The association said it has not contacted the carriers or any carrier association on this.
Mr. Guilbault said as far as advice to agents, PIA is telling them they need to tell carriers that the producer owns the rights to his or her book and that it is legally protected information.
"The fundamental basis of ownership of the agent's book is core to the agency's valuation," noted Mr. Guilbault. "The request to divulge this information puts [agents] in a very uncomfortable situation and it is highly inappropriate to ask."
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