Ladies and Gentlemen,

UFAA has recently received many emails and telephone calls from the Farmers Agency Force regarding whether Farmers/FGI has the legal right to unilaterally cut the agency force’s commission rates.  What is surprising is that these questions come from 30-year agents, Topper Club members, even new agents. The answer is in the AAA, Agents Appointment Agreement. Commission rates are not guaranteed and are subject to change, at the discretion of FGI. Years ago, FGI explained to the agency force that the purpose of not guaranteeing commission rates in the AAA was that if the commission rates were locked in then FGI could never increase the agents commission rates.

The thing that is most perplexing to me is why agents are questioning this upcoming commission cut now, when for the last 5-10 years they have been seeing commission cuts in new business commission, renewal commission, contract value, etc. The answer is painfully clear that agents did not, nor do they read their AAA contract periodically to understand their legal rights.  The first conversation with agents when they call UFAA is which AAA (year) do you have and have you read your AAA? That is why it is so important to be a UFAA member so that UFAA can help educate and inform its members.

Tom Schrader
President
United Farmers Agents Association