I am a captive agent I would like to go independent

Message

Author

Posted: Wed Apr 28, 2010 4:50 am Post subject: I am a captive agent I would like to go independent

---------------------------------------------------------------------- ---------- I'm a captive agent...I would like to go independent. If I start building a book of business on the side what would be the potential legal ramifications?

Gus

New member

Joined: 28 Apr 2010
Posts: 1

1.33 Dollars($)

Posted: Wed Apr 28, 2010 4:55 am Post subject:

Depends...things that come to mind are violation of any number of potential contractual agreements, not the least of which would be non-compete and the legal implications of the agent-principal relationship. You'll have to look at the captive contract you signed and any other legal documents you signed as well, including non-compete, ownership/vested interest rights, etc. InsTeacher

InsTeacher

Moderator

Joined: 13 Aug 2007
Posts: 1343

Location: Oregon, USA
119.93 Dollars($)

Posted: Thu Apr 29, 2010 1:22 pm Post subject:

Yes, you have to look through your contract. There's nothing wrong if you wish to go independent, but you can only do it after you're released from your current responsibilities. Are you prepared to wait till that long? _________________ Register Now to have your Insurance queries solved.

anonymous00

Guest

Posted: Thu Apr 29, 2010 3:04 pm Post subject:

If you are a captive agent, your contract with the insurer probably forecloses the ability to be appointed with any other company in the absence of prior-authorization from your insurer. Action notices of appointment are public record and your insurer will discover that you have been appointed by another company in short order. You contract very likely includes an immediate termination provision. As for the so-called "non-compete" provisions, most are only marginally enforceable. Your clients are free to to business with any agent, any insurer of their choosing. What you cannot do is actively solicit their business. That doesn't mean you can't send them a simple letter announcing your new status as an independent agent, without mentioning the fact that they can call you for a new quote. The bigger issue concerns use of "proprietary" information -- that is, the names and addresses of your "clients" who actually are the company's and not yours. Obviously, you probably have a list of all such clients. Using that list could get you in trouble. Do a little research on the validity of non-compete provisions, to see how others have dealt with it, even overcoming lawsuits against them. _________________ CA-licensed P&C Broker-Agent and Life Agent. CA Insurance Lic #0596197. Now investigating insurance company abuses, and providing litigation support and expert witness services. Send me your questions, and I'll send you my answers.

MaxHerr

Moderator

Joined: 29 Nov 2009
Posts: 4622

Location: Pomona CA
209.53 Dollars($)

Posted: Fri Apr 30, 2010 12:07 pm Post subject:

I'd agree that it could pose a real problem for you if you start using the current employer's client database for generating your own business. Go through your employment agreement and find out the challenges that lie ahead. _________________ Register Now to have your Insurance queries solved.