Thanks for dropping by............

Hi Insurance Agents,

Welcome to my Blog. I'm excited to be offering tips and ideas that have helped me through the years selling insurance. Here you will find articles, strategies and recommendations on increasing your productivity in the insurance industry.



In the eight years I have worked in the Insurance industry, I have been fortunate to work with many top producers that have shared successful ideas from which I have been able to form some practical strategies.



The tips that I will offer here will keep you increasing productivity and income.



Please check back weekly, as I will be adding articles and tips to increase your bottom line.

Cheers,

Ethan Selph


Wednesday, May 26, 2010

What is "churning" or "twisting" with health insurance

I have had several conversations with different insurance producers on my strategies for selling health insurance.  Some have accused me of "twisting" or "churning" policies.  I will explain how I sell most of my clients and you can decide on your own what you think "twisting" or "churning" is. 

I call my clients every 4 months to check on them and their policy.  At renewal time if I can find a better policy for a cheaper price I will apply through that company.  Here is an email from a prominent GA when I asked him if he thought I was "twisting" or "churning" insurance business.

Hey Ethan,


You are right in that if you are saving the client money and/or providing them better coverage (or a reasonable combination of the two), you are safe from any of your sales being considered churning. This is what you are doing when working with old clients and no insurance department or anyone else for that matter would ever give you a difficult time for doing this, because you are obviously doing what is in the better interest of the client.

I've never heard of any sort of 20% or other percentage rule. I think whoever you talked to heard this hear say from a non-credible source, or maybe was just confused altogether. If there was such a rule, it would be state specific and I can tell you that rule definitely does NOT exist in PA. And I've never heard of any other state having any such rule.

One other thing to add, even if a specific state did have such a rule, it would be impossible for them to do anything to you as an agent if you saved all of those clients either money, or gave them better policies. You are really doing what's in the best interest of the client at that point. What are you supposed to do, turn the client away even though you can save them money? Bottom line is, your safe. You're really got no concern with this.

Thanks Ethan!

Thanx Much,
John Pequeno
American Insurance Organization


Here is the Wikepedia version of "twisting" or "churning" health insurance. 

§ 781. Twisting
(a) A person shall not make any statement that is known, or should have been known, to be a misrepresentation (1) to any other person for the purpose of inducing, or tending to induce, such other person either to take out a policy of insurance, or to refuse to accept a policy issued upon an application therefor and instead take out any policy in another insurer, or (2) to a policyholder in any insurer for the purpose of inducing or tending to induce him or her to lapse, forfeit or surrender his or her insurance therein.

(b) A person shall not make any representation or comparison of insurers or policies to an insured which is misleading, for the purpose of inducing or tending to induce him or her to lapse, forfeit, change or surrender his or her insurance, whether on a temporary or permanent plan.

West's Ann.Cal.Ins.Code § 781

Churning, also known as twisting, is an attempt by an unscrupulous agent from an insurance company to cancel your existing policy and replace it with a new one, drawing down your cash value (called ?juice? in industry jargon) to pay for it. This activity generates additional commission for the agent and may result in your having to pay more down the line. It is also a word used to describe the actions of a stock broker who continually buys and sells for an account, churning profits for the broker oftentimes eating up whatever profits might be there for the consumer.


You can view the link here at http://wiki.answers.com/Q/What_is_the_difference_between_churning_and_twisting_in_insurance