Exclusivefocus - National Association of Professional Allstate Agents ...

agent issuesProtecting Your Book of BusinessBY RICHARD LARKIN, CLU©The most valuable asset of Allstateagency owners may be the transferableinterest they have in their book ofbusiness. Prior to 2000, the majority ofAllstate agents were employee agents,and the vast majority of them participatedin the Allstate Agent Pension Plan.Until then, this was their primary vehiclefor funding their retirement. Whenthey lost their employee status and becameindependent contractors (referredto by many as a forced conversion), theywere no longer eligible to participate inthe pension plan.Under the new Exclusive Agent contract,the value of their book of businessbecame a major source of their retirementprogram. However, the security of thatasset is vulnerable, subject to the whimsof Allstate. The company, as has beendetermined, legally may tamper with theagency owner’s right to sell it, notwithstandingthe rampant and widespreadcomplaints of Allstate’s meddling.Furthermore, agency owners, despitebeing called by the company “independentcontractors,” are subject to performancestandards. These are establishedexclusively by Allstate, subject to changeat any time for any reason. Should Allstatedecide to terminate an agencyowner for failure to achieve ExpectedResults, the value of the book will likelysuffer an immediate decline in value.There is little need to examine the manyadverse consequences that may befall anagency owner who is forced to sell, or theunsavory ways they manifest themselves– these are all too familiar to too many.The issue of an independent contractorbeing subjected to certain expectedresults established arbitrarily, and whichare of questionable legality, has becomeof immediate concern due to recentevents, the first of which is the increasein the number of agency owners nowreceiving termination notices, and thesecond being the February 6th article inthe Washington Post that reported that“Allstate last week declared, despite unprecedentedtrouble in the markets, itremains financially strong. But tuckeddeep inside a company report is evidencethat Allstate changed its bookkeepinglast year in ways that improve its financialappearance.”The legality of the bookkeepingchanges is not known at this time. Butwhatever that outcome turns out to be,it does not escape the appearance that adouble standard is being practiced: onefor senior executives whose compensationis predicated upon meeting expectedresults, another for the Expected Resultsagency owners are required to meetto keep their job. This appearance of adouble standard would likely not gaintraction except for a multitude of reasonsthat, when taken in total, suggest the existenceof a corporate culture concernedwith the accumulation of personal wealthto the detriment of agency owners, employees,policyholders and the insuranceconsumers.Consider the following events (spaceprecludes including the many more thatexist), all of which have occurred withinthe past two and one-half years:Lawsuits:• September 20, 2008. An accountantwas struck by an Allstate insureddriver in a low-impact accident. Sheunderwent three months of physicaltherapy and other treatment. The medicalrecords were provided to Allstate,as well as proof of lost wages. Allstate’sstand was that the pain was the result of a18 — Exclusivefocus Spring 2009