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I have been trying to find out what the policies are for insurance agents accepting gratuities.. I can't find a single person willing to clarify this for me. Makes me wonder why. Doesn't anyone have a clue. Or are they just not saying. ..... Also, am I the only person who feels the insurance industry is involved a) in collusion and b) the greatest "price fixers" of all time..... And NAGS working with the insurance industry to establish (fix) the pricing structure?

Re: Gratuities

Eris...those topics have been discussed probably hundreds of times on this forum...if you go back and review some threads you will get a bunch of viewpoints about insurance and agents, etc.

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Almost every Insurance Company has a rule against agents accepting anything for referrals and most have rules against glass companies offering them. And, some States have laws against it.

On the Agent side... Agents know the rules and some follow them and some don't. Generally anything offered or given to an agent is "under the table", with no paper trail.

On the Company side, you would have to be on their O&A program for them to really be able to do anything to you. They could then remove you if they found you breaking the rules.

On the State side, you definately don't want to test those laws. All it takes is one person (competitor) telling on you and it could be the end of your business.

All in all, your probably better off offering the agent something in return besides money/gifts. Return referrals, money savings from repairs over replacements, exceptional service, etc, etc, etc. I think this part is what seperates the business people that succeed and excel, from the prople that have the tools but can't get the jobs.

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my take on the agents getting these gift cards and gas cards is: they are making a profit off their customers loss which is illegal, they could loose their lisence if they were turning into the state as getting a kick back. its like rebating. but what agent is going to turn themselves in? or their friends. its going on more then anyone would think. I wonder what kind of service they have to offer if they have to buy the business. they could be the ones that are not installing correctly. thats what I would see them doing, is cutting cornors to make up for the kick back. kick backs are not free. that is how this mess got started with all the $500. rebates and then charging that extra $500. and then some.

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This is the one area I think perhaps the NAGS rebalance helped, although it has been taken advantage of. Without a $1,600 list isn't it harder to charge that much to cover all the rebates, kick backs, etc.?

I would think under the old system a judge would have a harder time telling you that you could not charge $1,600 if the NAGS list was $1,600. But trying to charge $1,600 for a part with a $200 NAGS list would seem much more difficult to justify. Not that it still doesn't happen, but I bet it has slowed down a lot of this type of practice.

Now, if the ins. co. would leave well enough alone, and stop pushing even deeper we could all be happy. Asking 43% OFF nags with $25flat labor, these greedy greedy ins. companies, while posting their $24 billion profits.

Hope everyone has a gret day

Re: Gratuities

I guess my concern is who is paying for the gratuity?

If the glass shop adding the cost to the insurance bill, there is an obvious problem.

However, if the shop is reducing their profit or mark up to cover this gratuity expense, shouldn't that be their business? Is it fair for an insurer to judge or dictate their business practices?

I have had only one glass company ask if they could offer such a program to my Agent's CSR's in a specific market area. While nameless, they are currently under investigation for something. Their activity did not impact my average cost per claim, so I think they ate the additional expenses as they stated.

I suspect this practice is probably best avoided.

Re: Gratuities

Eris, do you work in Brookfield/Butler?

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My question is if the glass company is not passing the cost of the gratuity on to the insurance, where are they making it up? NOTHING is free. So if they are not charging you for the gratuity, where is it coming from? They have to be making it somehow correct?

I would agree that in most cases any regular practice of offering a gratuity, rebating, or paying deductibles, etc. is probably best avoided. Especially if there are state laws that already prohibit such acts.

Re: Gratuities

Some companies advertise on the radio, some advertise on tv, some advertise in the newspaper. Some companies pay for employee benefits that others don't. Some companies have higher rent, general expenses, etc. Some give referral fees instead of doing any other type of advertising.

The money for the referall fee can come from saving in all of the above catagories and more. In my opinion, if the insurance company gets a bill for the same amount they would have from other companies (on their o&a for example), then what does it matter where the money came from? Maybe the owner takes less money? Maybe they work on a high volume? It really doesn't matter. There are so many different ways to get business and so many customers out there, if there are no laws being broken, more power to them.


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here's an example of who is paying that gratuitiy.

although this example is for eating deductibles.

two companies with numerous vehicles got their insurance cancelled because of the number of claims they had. they couldn't figure it out, after they dug into it they found out the friendly glass company who had been eating their deductibles had been turning in a w/s and a door glass, when they only replaced the w/s. that is how they made up the deductible.

i have no idea how they could not get in trouble, they were caught red handed, but they are still in business, and now they also rent budget trucks. in case anybody wants to rent a moving van. ha ha

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Gratuities come in two forms: those given in a reciprocal manner; you send me work I keep giving you gift cards and other spiffs. And then those given to agents to market my company-no strings attached. Agents' offices are filled with scratch pads and calenders from glass companies. The agent's pocket or secretary's purse is where the "naughty gratuities" might be: gift cards, sports tickets, gas cards and cash. Insurance companies are looking to catch reciprocity not vendor marketing. There is a difference.

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need a list of agents that are taking the kick backs? I have several agents ask me if I would match what the other guy is doing. I told them NO, we offer good service and will stand behind everything we do. it started as a $100. for 5 or 6 jobs now its $50 - $75. per job, They are offered to agents that let the glass shop bill around the network. agents will send in the loss forms. Check to see what agents will send in a loss form, that will tell you who is getting the kick backs. Maybe this should be put on the news investagations like the safelite guy that was installing out side. see it all the time.

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Eris....I used to sell glass to ya at Hoffer's.......ring a bell?

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from the Department Of Justice website

(c) Payment or acceptance of commission, brokerage, or other compensation

It shall be unlawful for any person engaged in commerce, in the course of such commerce, to pay or grant, or to receive or accept, anything of value as a commission, brokerage, or other compensation, or any allowance or discount in lieu thereof, except for services rendered in connection with the sale or purchase of goods, wares, or merchandise, either to the other party to such transaction or to an agent, representative, or other intermediary therein where such intermediary is acting in fact for or in behalf, or is subject to the direct or indirect control, of any party to such transaction other than the person by whom such compensation is so granted or paid.

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'Tis me, hackett!!

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Is shoving a Nike 1/2 way up the ins co's keyster a gratuity ? Just checking .

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If an Agent, Agent's CSR, or Claim Adjuster should
demand some 'special treatment' for referral business, they should be reported! Rest assured that the parent company would then conduct an investigation / audit to confirm your report--so that you are not caught in the middle. Activity of this sort is a firing offense-and perhaps illegal.

You should not be required to pay them for referrals! They have no right to this money.

Reports of improper behaviorre held in the strictest confidence.

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it is funny how Hal doesn't care about kick backs when the glass shop uses the network, but once a kickback lets the shop circumvent the network and possibly get paid more, Hal is calling for an all out investigation.

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I think HAL was saying if an agent DEMANDS payment for referrals he should be investigated, not if a shop willingly gives him a "kickback" as a thank you for the referral, as long as the shop does not raise the price to the insurance company to cover it. I think any rebate or kickback is wrong. Comapnies are in business to make money, not be eat profits. Any money used for these practices WILL be made up, and they is not enough volume for anyone to do this without making it up somewhere.

The tough part with all of this is, many glass shops wish agents/insurance companies could not "refer" or "list" any shops, but insurance companies say they "need" to service their customers by providing a choice of "reputable" shops in order to help protect the policyholder.

So do your part and educate policyholders. Inform them that in most cases the only "requirements" to be an "approved" shop on these lists are that you agree to their pricing and have liability insurance. None of these "lists" ask a shop what products they use, if they are certified by any organizations or manufacturers, or what the shops specific warranty covers. If the insurance company really wanted a list of "reputable" shops to protect their policyholder don't you think they would ask shops a few of these questions?

Then let the insured decide for themselves what the primary motivation for the insurance company/TPA is to have an "approved" list of shops. Is it for the policyholder’s safety, the insurance companies "bottom" line, or the agent's pockets?

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the more everyone responds to this query, the more i am beginning to wonder if some of the glass shops aren't responsible for the " I'm not giving you any business, unless you give me a treat!" mentality of the insurance agents.... They advertise how much they care about their insured's. But the reality of it is that it's not about the customer at all.... how do we fix this? is it fixable? does anybody want it fixed? Have all the sales reps forgotten how to sell quality? Or do they only know how to buy business?

Kind of a high price isn't it?

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Marketing to agent's offices is not illegal. Perhaps a point to consider is why do agents send their customer to your shop? (Instead of the 3 other shops in your town.) Hopefully you do good work, use quality materials and stand behind your work. Consider that all your competitors do the same things - now who gets the work? Maybe the shop that brought valentines candy to agent's office yesterday, or the shop that sent a box of pastries last week. Anybody getting the idea? Do you send thank you notes for last weeks job? Do you offer to take the agent's office to lunch once a year? Agents in my area will go out of their way to work around the evil empire, a.k.a Slavelite, if they feel appreciated and they get "something" for maintaining their ties with local glass shops. Good selling.

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AGRsalesguy, I agree with you, nothing wrong with bringing in a thank you. And getting the work because you do good work. And yes, more people ( sales people) need to learn how to sell. I would say 90% of the reps that I see come into offices will tell the agent you give 'x' amount of jobs and I will in return give you 'xxx' back. I have heard agents say they get any where from $50. to $75. gift cards after they send so many jobs. If you take a look at the most successful agent, he is not looking for kick backs, and he does not sale his product based on price. and they do not want the kick backs just good service. I stay away from agents that have their hands out for the rebates, I would not want my insurance through them either. its all about whats in it for them.

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AGRsalesguy, if it were just thank yous and lunches and even golf outings then all would be good. in our market it's more like what DK was talking about. You sound like a person with integrity and values.whoever you work for is lucky to have you there.

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