Are Insurance Consultants Biased?

In Texas, those in the insurance industry are a dysfunctional, yet close knit community wherein what one does in North Texas is common knowledge in South Texas and vice versa.  Everyone knows everybody, and thus it becomes fairly easy to ascertain outcomes with various insurance consultants who work on behalf of their clients.

For example, one well known Dallas consultant, who specializes in assisting political subdivisions, made a video taped presentation to a county Commissioner’s Court wherein he stated that after an exhaustive and thourough review of area PPO network pricing, that “XXXX XXXXX” (insurance company) has the best PPO discounts by a minimum of 20%, and if you go with XXXX XXXXX you will save 20% off your claims next year.” This public statement put this consultant in a corner on subsequent assignments – he had no other option other than to recommend XXXX XXXXX on every analysis he did.  In his next two assignments, as all of us predicted in advance, he moved the employer to XXXX XXXXX even though in both instances his methodology was flawed (we reviewed both cases after the fact and found the decision to move as problematic).

A well known (to us in the industry) and unknown (to uninformed employers) practice employed by some insurance consultants include dual compensation schemes – we will go into that in a later posting.(

An employer who is considering the services of a fee based insurance consultant, should ask for a listing of recent recommendations made to clients. A pattern may appear.

Many insurance consultants are biased. Analysis can be skewed honestly (with a dishonest intent). Numbers can tell any story one wants to tell. Employers can defend themselves by implementing certain defenses for effective and honest outcomes.


We have obtained a legal opinion (availble upon request) that Texas requires licensure to act as a fee-based insurance consultant. Two licenses are required: Life & Health Counselor License and Risk Manager License. Texas Department of Insurance lists of licensed insurance consultants can be found on the TDI website.

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