In recent weeks, we’ve reported on a number of cases of (apparent) agent malfeasance. Courtesy of a good friend (and colleague; Thanks, Pete!), we learn that the issues are far from resolved:
"If you’re paying an insurance broker to find the best group policy for your employees, should the broker be allowed to collect a commission from the company you select? If so, shouldn’t he at least have to tell you that he is working on commission?"
The answer, of course, is Yes. Interestingly, though, only the former is a matter of law. "Full disclosure" means something contra-common sense here in the home of the Reds and "The Tribe." One would think, after the very public disclosures of the two above-referenced cases, and the penalities levied against the carriers, that some legal reinforcements would be on the way.
One would be wrong:
"Nor has the department had any luck finding a lawmaker willing to sponsor a bill that would require insurance brokers to disclose to their customers such third-party payments."
It's obviously in the clients' best interests for such protection to be in place, but implementing such safeguards may not be as simple as it would appear. For one thing, such a bill would have to be broad enough in scope to cover all the various permutations of such arrangeements, but narrow enough that it doesn't hinder the agents' ability to make a living. Incentives can also help the client: currently, the two 800 pound gorilla's (UHC and Anthem) dominate the market. One way other carriers can begin leveling the playing field is by encouraging agents to more aggressively promote them.
Competition is healthy. Obfuscation is not.