of intentions, Wallace says, but will lack the sophistication and savvy of a licensed agent.

Jean Heisler, president of Ronan Insurance agency in Brick, N.J., and the government affairs representative for the Independent Insurance Agents & Brokers of New Jersey, says the state has not yet decided on what it is doing with exchanges.

Commissions remain a concern, she says, and for now, they still remain viable. In her experience, commissions are down 10 percent over the past two years to less than 5 percent for small groups—and her agency receives a flat fee on individual accounts.

And if they get much lower, she adds, “then we can’t keep going.”

BIG PROBLEMS FOR SMALL BUYERS

On the buyer side of the equation, small companies (50 or fewer employees) may find it hard to locate producers desiring their business. One primary reason producers might not want to deal with smaller groups is because insurers are beginning to show signs of shifting payments from a commission basis to a low, set monthly remuneration.

Brian Deitz, senior vice president for Reagan Consulting, says when it comes to the employee-benefit business, there are two camps: One is small group (50 lives or fewer); the other, large group (51 lives or more). Employers in the large group will presumably continue to stick with purchasing insurance in the private market, while smaller shops may opt to abandon private insurance company placements and leave their employees to shop for coverage through state exchanges.

Deitz says one of the major unknowns is exactly what an agent’s role will be in that case: “What happens to agents? Nobody knows.” NU

DIGITAL EXTRA:
Massachusetts could be the
example showing agents what
their future may look like.

ATTENTION MGAs / INSURERS

CSI is an A+ A.M. Best rated P&C/A&H insurer licensed in all 50 states, the District of Columbia and Guam, with a Life Insurance affiliate (Rating is effective May 6, 2011 for the latest rating, access www.AMBest.com). We have been in business over 33 years and our Parent Company has an AA+ rating from Standard & Poors.

CSI is looking for partnership opportunities with MGAs or Insurers who would like to work with an A+ rated carrier.

If Interested contact:
jjuricek@csi-omaha.com
402-997-8338
Central States Indemnity Co. of Omaha

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