How an agency gains access to carriers through a network will vary from network to network, so we are going to break this particular blog into 3 Parts: Mastercode, Direct/Sub-Code, and Hybrid. The first access point we will discuss is mastercode access.
Mastercode access is when your agency writes business with the carriers through the network’s code. Since a mastercode is not your own code, the biggest positive is that there is likely no written premium volume commitment attached to using it. A negative is that your agency’s name will not show up on the policy, rather the network’s name will. This typically brings into question whether-or-not you own the business since it is not in your name or code. Be sure to check with the network before signing a contract to get their exact stance on who owns the business.
Mastercode access can be set-up in two different ways as well. The first is that the network has their own retail side in the form of central marketing or a brokerage. If this is the case, you send the information to them for quoting and they will get back to you with options. Often this particular way of doing business can move a bit more slowly; just like working directly with an MGA or Wholesaler. The second access point to their mastercode may be through them assigning you a username and password for a particular carrier; this will often streamline the process since it takes away the middleman.
Depending on the network, you may also see a commission split while using a mastercode.
Lastly, if you ever leave the network, getting the policies out of the mastercode will require a policy list signed by the network or you may have to do individual BOR’s on all of your policies. So again, be sure to read those contracts so you know what your options are.
In summary, here are some questions to ask about using a mastercode:
- Will I be doing the quoting or will a central marketing team (network staff) be quoting for me?
- Will I have a mastercode option with all carriers?
- Is there a commission split?
- Is there profit sharing for mastercode business?
- Do I own the business I write through the mastercode?
- If I leave, will the network sign off on a policy list transfer to help move the policies elsewhere?
The next blog will touch on Direct Access to a carrier through a network.
To find out more about PIIB’s model, please reach out to firstname.lastname@example.org