do insurance agents get commission on their own errors and ommissions policy?
UPDATED: Oct 5, 2017
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Asked October 5, 2017
No, insurance agents do not receive commission on their own Errors and Omissions policies. The reason being that if any agent were allowed to make a commission from writing their own policies, it would in turn bring about abuse of the system. There are typically certain measures, statues, or rules in place that prevent such things from happening. This is also part of the reason why there are no independent or solely owned insurance providers.
Most insurance agents are allowed and even encouraged to write their own policies. For example they are encouraged to write a term life or a whole life policy for them and they’re immediate family, but it must be approved. Typically by another broker or regulatory. They should endorse what they are selling and be willing to use their own product. but as most companies would have it, they are not allowed to make commissions on anything they write for them selves.
In short, while insurance agents do make commissions on each policy they write, they are prevented in most cases from making any extra income on a policy they write for themselves. It keeps them from abusing a very powerful system but maintains a cohesive selling point when agents use the very products they are selling.
Answered October 9, 2017 by cap381