By Bill Rusteberg
Back in the 70’s Blue Cross of Texas sales reps were captive agents. Or were they?
In 1973 the starting monthly salary of a Blue Cross of Texas sales representative was $840 plus a company car. That was before taxes. No commissions were paid. Straight salary. Damn good income, better than the starting salary of a public school teacher. Life was good, Vietnam was a fading memory.
Independent insurance brokers were viewed as less than human, slithering creatures unworthy of representing the largest health insurance company in the world. Back in those days only college educated graduates were qualified to apply for a BCBSTX sales position, subjected to a grueling vetting process including psychological testing (Sadler Testing) and a personal interview by the President of the company at the home office in Dallas for questionable candidates like me who didn’t quite meet the basic requirements. Company attire was suit and tie at all times whether it made sense or not.
BCBSTX didn’t broker business until 1982. At least that’s what the HOSOBs thought (Home Office SOBs).
I found out differently when transferred to another office in the later part of my nine year tenure with the company. Unknown to management some of my fellow sales reps. were selling insurance outside the company, on company time and expense. They were brokering insurance with great success, some earning more in commissions than they were on the company tit.
In 1982 the HOSOBs decided it was time to enter the brokerage business. Little did they know members of their sales force were experienced and seasoned brokerage professionals, slithering creatures worthy of representing the largest health insurance company in the world.
It was time to leave the company tit and the timing was good. The Golden Age of health insurance brokerage was about to begin and would continue through the mid 90’s. Easy money health insurance brokers earned more money than they could shake a stick at. Medical trend became their best friend because a 10% commission of a greater number meant more, an automatic pay raise whether they earned it or not. Pinch me, it can’t be true!
In the late 70’s a senior BCBSTX sales executive left the company to start an insurance brokerage in east Texas. Everyone was surprised because he was a rising star in upper management and was widely expected to seize the company presidency one day.
Little did anyone know his silent partner was a senior BCBSTX official with access to marketing and renewal activities. Suspicions were aroused when the small east Texas brokerage was experiencing rapid growth, writing business throughout the state in direct competition with BCBSTX. It wasn’t long afterwards the BCBSTX high ranking official left the company to join his partner in Tyler.
BCBSTX brokerage activity was systemic, from top to bottom, well before the company’s official transition from captive agency to independent brokerage.
And now you know the rest of the story……………
