Although it's an infrequent occurrence, insurance companies do go belly up. When this happens, it's up to the Department of Insurance in the state where the carrier is (was?) domiciled to swoop in an attempt to save the day. This is generally done by way of a process called "rehabilitation" which would probably make for an interesting (if overly wonky) post, but that's not why I bring it up.
Recently, the American Community Mutual Insurance Company found itself in dire financial straits, and was forced to withdraw from the marketplace. The Michigan Department of Insurance (DOI) has stepped in, and has assumed "operational control" of the company; that is, they're running the day-to-day operations while looking for a potential buyer (or whatever other mid- to long-range plan they hope to accomplish). When a similar circumstance overtook Shenandoah Life last year, the Virgina DOI immediately notified agents contracted to do business with ShenLife, warning us of dire consequences if we moved our groups to other carriers. What actual enforcement power they may have had in that regard aside [ed: none, really], they at least pro-actively looked to keep the marketplace steady.
Now comes word from FoIB Rick B that Michigan is apparently not following Virgina's lead in that regard. According to Rick:
"There are no flies on the Michigan Blues.
They are already offering agents $150 per-group commission incentives to get ACM groups to switch now through July 1, and $75 per group for those that switch between July 2 to Oct. 1. For individual plan members, they are reimbursing agents on the "A" commission schedule, 15%, for switchers."
So in addition to regular commissions for writing the group, some agents will receive special "signing bonuses" for deliberately undermining whatever efforts the Wolverine State's DOI might have in mind to salvage the harried carrier. As I replied to Rick, these guys give vultures a bad name.
[Hat Tip: FoIB Rick B]
Recently, the American Community Mutual Insurance Company found itself in dire financial straits, and was forced to withdraw from the marketplace. The Michigan Department of Insurance (DOI) has stepped in, and has assumed "operational control" of the company; that is, they're running the day-to-day operations while looking for a potential buyer (or whatever other mid- to long-range plan they hope to accomplish). When a similar circumstance overtook Shenandoah Life last year, the Virgina DOI immediately notified agents contracted to do business with ShenLife, warning us of dire consequences if we moved our groups to other carriers. What actual enforcement power they may have had in that regard aside [ed: none, really], they at least pro-actively looked to keep the marketplace steady.
Now comes word from FoIB Rick B that Michigan is apparently not following Virgina's lead in that regard. According to Rick:
"There are no flies on the Michigan Blues.
They are already offering agents $150 per-group commission incentives to get ACM groups to switch now through July 1, and $75 per group for those that switch between July 2 to Oct. 1. For individual plan members, they are reimbursing agents on the "A" commission schedule, 15%, for switchers."
So in addition to regular commissions for writing the group, some agents will receive special "signing bonuses" for deliberately undermining whatever efforts the Wolverine State's DOI might have in mind to salvage the harried carrier. As I replied to Rick, these guys give vultures a bad name.
[Hat Tip: FoIB Rick B]
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