Fired Agent Opposed Credit Scoring

An influential Allstate agent who testified against insurer use of credit scores in underwriting saw his contract terminated a few weeks later, although Allstate said the two events are unrelated.

John F. Bryant, whose J&B Bryant Agency is in Hammond, La., had testified in early March before the Maryland House Economic Matters Committee on House Bill 521. The bill seeks to extend the expiration date of statutes prohibiting insurers from, among other things, denying coverage to consumers on the basis of their credit scores.

At press time, the bill had passed both the Maryland House and Senate, and had been forwarded to Gov. Parris S. Glendening for his consideration.

Mr. Bryant told National Underwriter that he believes his appearance before the Maryland lawmakers was one of the reasons behind his termination. He said that he did not identify himself as an Allstate agent.

However, he did tell the lawmakers that he was representing Allstate agents in his capacity as national board member of the National Association of Professional Allstate Agents, a Canton, Mich.-based group, and as legislative chair of the Coalition of Exclusive Agent Associations, a Baltimore group.

But what probably sealed his fate, he said, was his response to a legislator's inquiry about whether he knew of any insurer that requires agents to run a prospective client's credit reports before giving a quote or even checking the client's motor vehicle record. He said he identified Allstate as one such insurer.

In an April 3 letter to both the Maryland House Economic Matters Committee and the Senate Finance Committee, NAPAA reported that a group of Allstate “operatives,” along with a hired police officer, went to Mr. Bryant's office on April 2 to inform him about the termination. Mr. Bryant said that the “crew” included three managers, a human resources staffer, two telephone technicians and a computer technician.

As for the purpose of the paid police officer, Mr. Bryant said the Allstate people told him they wanted no “confrontation.”

Although the telephone and computer systems were removed from Mr. Bryant's office, he refused to give up his client files. “According to the [Louisiana] Department of Insurance market-conduct people, I'm responsible for maintaining those files for five years,” he explained.

The official termination letter presented to Mr. Bryant stated that the reason for the action was his “failure, as key person under the Agreement, to maintain a professional and business-like relationship” with Allstate, as well as his agency's “failure to meet business objectives established” by Allstate. The insurer's representatives declined to give a clearer explanation, said Mr. Bryant.

While confirming that Mr. Bryant and his agency “are no longer authorized to do business on behalf of the Allstate Company,” Mary Alice Horstman, director of media relations for the Northbrook, Ill.-based Allstate, declared that Mr. Bryant's vocal opposition to credit scoring had “absolutely nothing to do with his termination.” She declined to go into the specific reasons for the termination due to Allstate's policy against discussing the details about contractual relationships with its agents.

But speaking generally, Ms. Horstman did state that the reason was the “failure to achieve the business objectives established by the company and agreed to by the agency,” as well as Mr. Bryant's “failure to maintain a professional and business-like relationship with the company.”

When pressed to define “maintaining a professional relationship,” Ms. Horstman stated that Allstate expects its agents to act in good faith in the performance of their contractual obligations, and “not to participate in any activities that damage the Allstate brand, the Allstate reputation in the marketplace, or its relationships with its customers, its agencies or its employees.”

In Mr. Bryant's view, “company objectives” consisted of production growth and loss ratio, both of which he said he had achieved.

Speaking generally, Mr. Horstman said that Allstate has basic business objectives for achieving growth that are based on Allstate's property-casualty, life, and savings business, as well as profitability. “Our intent is to assist the agent in becoming successful by meeting these business objectives,” she said. “Several factors are taken into account if an agent is deficient in any area, and that would include if there are market condition challenges, or something significant has happened in an agency.”

Mr. Bryant said that the only Allstate objective he did not meet was life insurance sales quotas, which he believes are illegal under local law.

Rod Guilmette, editor of the NAPAA newsletter DirectExpress, said that Mr. Bryant was a driving force behind legislation prohibiting insurers from imposing life and health sales quotas in Louisiana as a condition for the authority to sell property-casualty insurance. Mr. Bryant said he is working on having similar legislation introduced in seven other states.

The NAPAA letter said that one of Allstate's business objectives is “to impose credit scoring on the American people.” NAPAA wrote the Maryland legislators that “the insurance carriers don't want you to hear the agents' voices because no one knows better than agents how credit scoring affects their customers.” By terminating Mr. Bryant, Allstate drives home the point to the rest of the agents that they must not “reveal the truth about credit scoring,” NAPAA said.

Mr. Bryant said he has spoken out against credit scoring in several states, including Georgia, Michigan, Montana, Texas and Washington. He also has been advocating for legislation imposing “for cause” termination requirements on insurers seeking to break contracts with agents.

Mr. Bryant said he had learned that at a meeting in Allstate's Florida home office the week of March 25, “management informed the agents who were there that they were looking at ways to separate the troublemakers from the company and that they would be separating all of them.”

Mr. Bryant speculated that he was probably at the top of that list due to the fact that he kept agents around the country informed of what Allstate “was doing wrong.” This, he said, was part of his duties as national board member of NAPAA and as legislative chair for the Coalition of Exclusive Agent Associations. The CEAA functions as an umbrella organization for associations of exclusive agency producers, such as NAPAA, Mr. Guilmette explained.

Mr. Bryant not only has pushed for legislation against credit scoring, Mr. Guilmette noted, but also for just-cause termination of captive agents. “He's a real workhorse,” said Mr. Guilmette.

Mr. Guilmette conceded that at least one amendment to the Allstate appointment contract contains “verbiage” indicating that its agents may not speak with the media or legislators without jeopardizing their position. It is unclear, he said, how and whether such an edict can apply to non-Allstate activities or information. “It's difficult for an agent to step through this minefield,” Mr. Guilmette observed.

But the ability to terminate contracts at any time for any or no reason “is how Allstate controls the agency force,” he said. He also observed that this is generally the type of approach taken by insurance companies toward their captive agents, “although Allstate does seem to be the most ferocious about it.”

He stressed that whatever Mr. Bryant's future professional plans are, he will continue as an NAPAA board member and as “a voice for the agents.” For its part, NAPAA is consulting its attorney for its legal options in Mr. Bryant's case, Mr. Guilmette said. NAPAA also is notifying as many member agents as possible “that their champion, their standard-bearer has been terminated,” he said.

Reproduced from National Underwriter Property & Casualty/Risk & Benefits Management Edition, April 15, 2002. Copyright 2002 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.