Captive to
Independent
The independent model provides more choices for clients and a
more flexible and profitable career path for agents.
As a captive agent, you enjoy a secure and supportive environment. Your parent company provides office support including human resources, marketing, administrative functions and a range of other services. Captive status works well for many agencies but you may be looking for other options.
If you are an entrepreneurial agent who wants more FREEDOM, FLEXIBILITY and MONEY transitioning to independent status may be a good choice. But independence involves some considerations.
Review your current Captive Contract
You must first take a look at your Captive Contact for language pertaining to non-compete or non-solicitation.
A non-compete agreement forbids a producer or controlling employee from taking accounts for which they are responsible to another agency.
A non-solicitation or non-piracy agreement forbids a producer or other employee from soliciting the prior agency accounts or prospects for his or a competitor’s benefit.
All non-compete agreements should contain a provision prohibiting the ex-employee from competing with the former agency for an appropriate period of time (usually one to three years) and within an appropriate geographic area. The non-compete provision also should prohibit the employee from soliciting the agency's customer accounts, especially the accounts of customers with whom the employee dealt during his employment and the accounts of any potential customers that the employee courted for the agency while he was employed. Non-compete agreements are scrutinized closely by the courts and will not be held enforceable if they are over broad. Any restrictions that could be interpreted to reduce or limit competition must be reasonable in scope and duration, not harmful to the general public, and reasonably tailored to protect the agency's interest in its book of business and related confidential information without unduly burdening the employee. Non-compete agreements that unfairly restrict an individual insurance agent or broker from earning a living in his profession will not be enforced.
Join an Existing Agency or Start Your Own?
If you are transitioning from a captive agency into an existing independent agency most of your work is now done. If you are considering opening your own agency, please refer to the section entitled Starting an Insurance Agency to review the necessary step.
Let IIA of Illinois Help
The Independent Insurance Agents of Illinois (IIA of Illinois) is the statewide association representing independent agents and assisting with their professional needs. Membership with the IIA of Illinois entitles you to use of a wide variety of products and services, markets, networking events, ongoing professional advocacy on legislative issues, education, up-to-date industry news, resources and more. Click here for membership information.